KYB wants to ensure that our clients cash in on all the savings they can. This is why we're giving you tips on retirement, loans and investments!
How Investments are taxed:
- 401K/IRA - If you withdrawal before retirement, the funds are taxed at your income tax rate.
- Rental Property - Income from rentals is taxed at ordinary income tax rates. However, capital gains are taxed at your capital gains rate. Also, if you reinvest money from a sale, to the purchase of another property, within 180 days then any gains are not taxed.
- Qualified Dividends- Dividends from stock holdings are taxed at the long-term capital gains tax rate 0-20% depending on income. This of course does not apply to 401Ks or IRAs.
- Non-qualified Dividends -Dividends received via real estate, investment trusts, closed-end funds and master limited partnerships are usually non-qualified dividends and taxed at your ordinary income tax rate.
Read 20$Finances article for more information on Investments as well as Capital Losses & Negative Income.
Getting that Loan:
Small businesses provide 55% of all jobs, and 66% of all net new jobs since the 1970's according to Forbes 'investing'. Here are some tips to make it easier to get approved for a loan at a lower rate.
- Set-Up the appropriate legal vehicle for your small business. Are you an LLC or S-Corp? Once you create your identity you will receive your EIN, which is similar to your social security card and is used to build your company's credit history.
- Have a separate small business checking account. Don't link your personal finances with your business.
- Get help with payroll & benefits.
- Consider Quickbooks or something like it to track your finances. Better yet, outsource your accounting to experts who can keep you up-to-date on financial/tax trends.
- Build an online presence.
Saving for Retirement: Things Small Business Owners should know!
Business2community.com has some cool tips on how to get started on saving for those Golden Years!
- Plan for the Future - It's always a good idea to have a plan. Make sure you prepare your business for future hardships such as injury, illness, death and so on. Ask yourself some of the big questions: What would you like to happen to your business? Do you want to sell it, pass it on?
- Meet with a Financial Adviser - An accountant can help you make more informed decisions including decisions about savings, taxes, & investments. It's better to have an industry expert lend their knowledge. For some people, the finance side of business is not their strong point.
- Start a Savings ASAP -Whether it's a simple SEP, traditional, and Roth IRAs or regular or solo 401(k)s, each has its pros & cons; research which one would be best for you.