CliffordFu478

There are three principal areas we want to maintain in thoughts as the year ends:

1. Taxes

2. Corporate formalities

3. Preparing for subsequent year

Revisit the idea of converting your ten largest bills.

This is an ongoing process that should be accomplished at least twice the 1st year. Its not realistic to anticipate you will convert all of your largest expenses the 1st time around since its as well huge of a taskthis is a habit needing to be developed more than time. Our biggest expenses, habits, and businesses all adjust more than time. As your life evolves, so should your deductions, so maintain current.

Approach: upstreaming earnings.

The purpose of upstreaming earnings is to shift revenue from this tax year to the next tax year. Whatever your operating account balance is on December 31 will get added, as of January 1, to your last years earnings. If you have a $50,000 balance, for example, going into the next year, thats taxable revenue. You consequently must upstream the income, generating it no longer taxable for that year. This strategy is applicable if you have an S Corp, partnership, restricted partnership or sole proprietorship.

How to upstream revenue

Upstreaming revenue is achieved by setting up a new entity such as a management organization with a various yearend than your enterprise. A businesss earnings can then be shifted out of the 2006 tax year to 2007. You will want a contract and invoices to reflect this agreement among your company and management business. Move the $50,000 balance to your management organization with a June 1 yearend, for example. The funds should be moved ideally at least on a monthly basis, not just when at the end of the year. I recommend taking 5 to ten checks out of your checkbook and place them in a file for the upcoming year. In January, if you uncover out you had some expenses you misseditd be a lot greater to have a check in sequence that you can write from December. premier law group