welcome back everybody today I'm going
to break down how you can use an S
corporation to Skyrocket your wealth
past $100,000 or more now I'm a
registered CPA attorney best-selling
author and own multiple companies in the
tax and legal industry and I kid you not
we help thousands of clients around the
country every year squeeze far more at
profit out of their company because of
the S corporation strategy unfortunately
too many people either misuse the S
corporation or don't understand the full
range of investment opportunities and
strategy that they can take advantage of
with the S corporation well today we're
going to solve this I'm going to walk
you through three ways or reasons why
the S corporation should be a part of
your business
structure now let's dive into it what is
an S corporation an S corporation is
simply a way of doing business so many
people understand the LLC or limited
liability company well you can take an
LLC and tax it as an S corporation you
could have an Inc or a corporation taxed
as an S corporation it's a way of doing
business now the way I've been
explaining this for years and it just
makes so much sense a pitcher says a
thousand words let's look at the
trifecta this is a way I've used to
explain a business owner's overall
operations to build wealth and bring it
all together on the left we want to put
operations on the right we want to put
assets and down at the bottom is your
trust or your 1040 tax return so when
you're doing business or operations you
could be just a plain old soulle
proprietorship you could be an LLC or
you could be be an ES Corporation and
again the es Corp could be an LLC taxed
as an es Corp or it could be an INC now
if I'm going to be over here on the
asset side and buy rental properties or
invest in crypto or Investments I might
have an LLC over here and this is the
trifecta assets on the right operations
on the left all flowing downhill however
we're not worried about the asset side
the S corporation lives over here this
is where we want to talk about the S
corporation it's a way of doing business
so let's use an example here let's say
that you are a landscaper everybody can
get their head around that as a kid I
would mow Lawns and sometimes get paid
for it at least I try to now if I'm a
landscaper I really have three different
ways I could operate I could just start
going out and talking to people and say
let me mow your lawn that's called a
soul proprietorship or I could form an
LLC limited liability company best
landscaper in town comma LLC we mow your
Lawns comma LLC whatever and then over
here I could actually be an escorp and
again it could be an LLC tax as an
escort don't worry about that now if I'm
a sole proprietorship I'm going to file
on a schedule C tax return if I'm an LLC
I'm going to file on a schedule C tax
return but an S corporation files its
own corporate tax return again it's a
way of doing business now let's compare
these for a moment let's say I'm out
there and I bring in 100 Grand I go out
and I work my buns off and I bring in
$88,000 a month mowing lawns doing
sprinkler systems and I spend $25,000 in
expenses marketing auto fuel equipment
supply cell phone and I net
$75,000 okay that's cool well you're
going to pay self-employment tax right
out of the gate of
15.3% well if I do an LLC do I get to
save on that tax nope you pay the same
tax 15.3% I brought in the same 100
Grand I spent 25 in expenses I net 75
and I'm going to pay 10 grand 10 grand
then I might pay fed tax state tax so
people this is important point llc's do
not save tax let me repeat that llc's do
not save tax so I have my first way of
doing business is this sole
proprietorship my second way of business
is just doing an LLC but it really
hasn't moved the needle I'm still a
landscaper paying way too much in tax so
what's this S corporation all about well
let's start to unpack it and this
unleashes strategy number one okay with
an S corporation I make the same 100
Grand I have the same $5 Grand in
expenses and I have the same net income
you could even have the same business
account and again you could be an LLC
but you've made a special election to be
an es Corp by the way let me just set
this concern aside it is super expensive
to become an S corporation we charge
$250 that was a joke because I want to
let you know how easy it is it is not
that hard to become an S corporation so
all right so I'm an S corporation I'm
making the same 100 Grand the same 25
Grand in expenses I net 75 oh oh oh but
check this out no self-employment tax no
corporate tax what and no Obamacare
which is called ACA affordable cares Act
tax well this is pretty cool so I can
avoid all these taxes by becoming a US
Corporation well for those of you that
have already heard about the strategy
there's one catch you've got to take a
salary a reasonable salary and then
everything else flows out the bottom now
in this example I might do a salary of
25 Grand and the rest is flows out the
bottom 50 Grand now for you accountants
out there that are some of you already
freaking out I get it now by the way I'm
a CPA I'm a tax attorney I teach classes
on reasonable comp I've read every case
on reasonable comp Do Not freak out on
this I have a payroll Matrix that helps
us Define what this salary needs to be
this is just an example for a moment but
I'll tell you when I have a client
making $5,000 or more I might be in a
50/50 allocation and it's not the end of
the world I have never ever ever had a
client audited for taking too low of
salary in the last 25 years ever and
I've even interviewed prior IRS agents
on my show working in the S corporation
Chicago office people this is okay so
get over it and just hear me out
somebody like Man Mark you kind of
Unleashed there well that's because I
talk to a lot of accountants that get
stressed out about this reasonable
salary issue and this is how s
corporations are misunderstood or
misused so what was strategy number one
strategy number one is that I don't want
to pay all of this F this is a big deal
because the more money you make the more
you pay of the f- word f- word f I hate
FICA I don't want to pay FICA on every
dollar so we convert to an ESC Corp I
got to tell you every dentist Doctor
engineer landscaper restaurant owner CPA
attorney independent Consultants we're
all s corporations because once you make
$50,000 or more I want to split this
income I want to call some of it salary
and some of it pass through this is the
strategy so one of the best ways to
unlock your business potential and make
more money is to use this form of doing
business and create a salary that's
reasonable and push out all this profit
and when you start saving this money
we're going to start deploying it in
some very powerful ways that my friends
is strategy number one now let's unpack
that a little bit some people say well
Mark that sounds super complicated and I
can't take a paycheck my income's up and
down I got it I got you don't worry
first of all it is not that complicated
let me put your concerns aside you're
going to hire a payroll company to do a
payroll report for you quarterly you're
not going to get a paycheck I'm not
going to worry about your cash flow
we're going to look at your income in a
rearview mirror every 3 months we're
going to look back and go hey how much
money did you take out how was your
profitability let's claim a little bit
of salary do the report gone done at the
end of the year all those reports add up
and we've got your savings calculated
it's clean it's easy next some of you
may be fighting an uphill battle with
accountants that have already freaked
you out on the S corporation they're
like oh my gosh the S Corp doesn't work
for you because you got to take such a
big salary and reasonable comp and blah
blah blah blah please get a second
opinion I beg of you and I talk to
accountants all around the country
teaching that reasonable comp is not the
scary evil monster many of you have been
taught to believe it can be very simple
okay now let's move to strategy number
two because as I indicated when you save
on that F and that self-employment tax
and set up that little salary strategy
you're unlocking more profits well I
don't want you to go out and get a
better lease on a BMW or a Range Rover I
want to use those profits to build
wealth exponentially super powerful and
when my clients catch the vision of this
it is unbelievable they're sending me
thank you cards and Christmas gifts for
years I'll send you my address later now
and remember it's easier to save money
than make money trust me so let's look
at our Trifecta here we go over on the
left side we're now going to have an SC
Corporation get again you little LLC
taxed as an escorp the sales from your
business are going to come in your
expenses are going to go out you're
going to take a W2 and you're going to
get what's called a K1 that's your
profit and we're saving taxes and that
profit that you're making and those
taxes you're saving we're going to fund
a solo 401K do you know you can have a
401k at your day job your spouse can
have a 401k you can have a 401k but you
can also have a solo 401K in your
business frankly I want to tell you you
can have as many 401ks as you want but
we need to fund them so we're going to
set up this solo 401k and start to plow
money into it and this year it could be
as high as
$30,000 that can go deferred and come
out of your W2 saving you more in taxes
and fund your solo 401k
and then the company can match that
contribution up to a certain amount so
this deferral in combination with your
match starts to build a bucket of wealth
and this wealth is what entrepreneurs
start to build and grow on the side and
notice what you're doing is you're
diversifying you've got wealth you're
building over here with the operations
of your business and you're building a
bucket of wealth with your 401k and you
can invest in what you know best you can
invest in crypto you could invest it in
real estate you could invest it in notes
or even buy your stocks bonds and mutual
funds so this 401K you get to drive the
car you get to be the trustee of this
and now in Step number two you've taken
the savings that you're generating here
and you're plowing it into additional
deductions and write-offs and tax
deferred growth inside a solo one 401K
now again some of you may go Mark that
sounds super comp complicated guess what
it really isn't again it's understanding
that your company can design a
retirement account for its owner it's
employee which is you our fee at our Law
Firm is $1,000 that's it $11,000 to meet
with a real attorney anywhere in the
country and design a 401k tailored to
your business you may have your spouse
on the payroll you might have kids on
the payroll you might be the only one on
the payroll who who knows we're going to
tailor it to your situation but when you
start to design the payroll portion in
combination with the 401K you find a
sweet spot and you start Building Wealth
with more tax deductions and less tax
that Synergy is almost
uncalculating and a solo 401K now
strategy number three and this is one of
my favorites and it's simple and easy
and you're going to love it people
remember business is family and family
is business so let's take our S
corporation and do what all the big
companies do build a board of directors
we're going to build a board and we're
going to put my mom and dad on the board
we're going to put my best friend on the
board we're going to put my spouse on
the board my teenage kids on the board
whoever I hang out with whoever I TR
travel with I want to collaborate with I
want to meet with I want to talk about
the business I want to explain what I'm
doing and grow the business with their
advice and support and insights so with
an S corporation I'll even just diagram
it cuz I love a picture is here's my S
corporation and I'm going to adopt a
board of directors and this board of
directors is going to support the
operations to increase sales increase
profitability and help me design a
system to build wealth now the beauty of
the board is that whenever you travel
you get a tax deduction together
whenever you have meals together CU
you're going to be talking business you
may be providing laptops you might be
providing iPads you might be providing
cell phones because this board is
supporting the operations of your
business the S corporation unlocks that
strategy and unlocks number three and
that is bringing together the people of
your life into your business and those
tax deductions need to be justified I
want to write off your travel your cell
phones your travel I mean this is I want
to create these write-offs let me give
you a fun example every one of my kids
now are 18 or older every one of them is
on my board well we're going to have an
annual company Retreat each one of them
has a little Duty they help me out
through the throughout the year it might
be marketing it might be administrative
well guess what I got to be able to get
a hold of them and so if I'm helping
them out with a laptop or a computer or
a cell phone I'm going to take a tax
deduction for that I'm going to take a
write off for that I may even give them
a $10.99 at the end of the year in their
Christmas stocking for some money I may
have helped them out throughout the year
so now I'm generating more writeoffs
inside my S corporation legitimately
audit protected to create more profit to
to fund more wealth and to save more
taxes it's like it it's like an equation
it's like a recipe for Success it's so
powerful now is it complicated no not
really you can hold a board meeting
tomorrow for those of you that already
have an LLC or a corporation you can say
this weekend we're going to go on a
weekend retreat and we're going to go to
this hotel or we're going to go to this
Resort or we're going to just go
somewhere and sit down and talk about
the business and you're going to pull
out a sheet of paper and go here's the
minutes of our meeting and here's what
we're doing and I love you guys and I
need you on the board
and oh by the way this trip was tax
deductible because you're all a part of
the business now and you slide those
minutes into your corporate book because
your corporate book is your asset
protection you've maybe heard it in my
other videos asset protection is
maintaining that company doing the
minutes maintaining the records and the
structure this is the beauty of the
corporation is that it unlocks all these
other strategies and you know what's
interesting your chances of an audit
with the IRS by using an es Corp go down
by
1,500% statistics every year show that
over 15 times less chance of an audit
with an S corporation compared to an LLC
I'm giving you a strategy that saves you
more in taxes and it's less chance of
getting audited that's how crazy it is
but people don't understand it they
don't take the time to apply them and
that's why I want to say thank you for
watching this video You're it's like I'm
preaching to the choir you're you're
there already learning the principles of
being a smart business owner and I want
to say thank thank you for being here
these three strategies may have caught
you a little off guard you're like oh my
gosh I better get a second opinion I got
to do that well that's the beauty of
being a business owner is that when you
take time to work on your business the
exponential growth on the back end it's
we can't even measure it it's so so
exciting now one last suggestion for
some of you that are busy in your
business and you're like oh my gosh I
need to take care of this I need to get
on top of this several things first of
all if you're not an S corporation yet
if you know that there could be some
savings here and I'm already maybe
making some sense please schedule a
consultation with one of my tax lawers
you can just pay hourly or our cost
again to set up an entire new entity
maybe less than $1,200 and you can meet
with an attorney on a zoom call anywhere
in the country now for those of you that
already have an entity and you need to
do your company maintenance you haven't
done those minutes in a few years your
books are maybe a little Dusty or
there's one sheet of paper in a drawer
somewhere our annual company maintenance
program is 200 bucks $200 we send you a
list of 25 questions to take to your
board meeting that you used to fill out
and you send them back to us we file
your company with finson that new Boi
report and also if there's a form that
needs to be filed with your state we
send that in for you $200 now if there's
a fee with the state we'll pass that on
to you but it's that simple that
affordable so you can delegate that
process if you want or you can pull out
that sheet of paper at the next Resort
and do it yourself but the point is
we've got to do it we've got to take
advantage of these strategies because it
really really will bless your life now
that you know how to set up your escort
properly you can begin to take action to
scale your we wealth quickly however if
you're still unsure you're not doing
enough to manage your taxes please take
a look at this next video where I walk
you through a tax and legal Playbook to
beat the IRS
