Skin care professionals can run into a variety of financial and legal problems in the course of owning and running a business, and overpayment of taxes and the lack of a viable estate plan are the most common. Part II of this two-part column will address tactics skin care professionals can use to address the issues of tax overpayment and estate planning.
Billions of dollars are overpaid each year in taxes as a result of people not using all the available deductions and tax laws.
To avoid this problem, structure your assets and income to reduce your taxes to the legal minimum. Proper use of legal entities can potentially save you thousands of dollars in taxes each year by enabling you to maximize deductions, create nontaxable income, spread income across multiple entities and defer income to a new tax year. For some, charitable entities—such as charitable remainder trusts, nonprofit corporations and family foundations—can also be used to reduce taxes. Following are several strategies many skin care professionals are not using.