We want to reward our FaceBook friends; here’s what we’ve got going on:

We have a boot camp going on in Salt Lake City, UT from June 20th to 21st and we would love to have you come! So here’s what we’ll do. First, go to our FaceBook page and click “Like” at the very top of the page. Next, give us a call and let us know that you saw this blog post, “Liked” us on FaceBook, and would like to attend boot camp. That’s it!! You do those two things and we’ll give you $250 off the original boot camp price!

If you refer a friend, have them do those same things, and when they call in, have them mention your name and we’ll ship you our award-winning book “Guaranteed Millionaire.”

The catch? Well, this is only open to the first 20 people that call in; we’ll only ship out the book to the first 10. So go for it! We’ll be waiting for the call…

By Lee R. Phillips

The Unemployment Compensation Extension Act of 2010 was designed to follow the “pay as you go laws,” which means, the bill needed to generate taxes equal to the cost of extending unemployment payments.

What does all this have to do with S corporations?  The plan was to make the small businessman pay for the unemployment bill by increasing taxes on “distributions.”

There are two ways a small businessman can get money out of an S corporation.

1. Salary
2. Distributions (Dividends)

Of course, the salary is subject to the social security and other “social taxes.”  Distributions, on the other hand, were not subject to the social taxes, i.e., payroll taxes.

The S corporation owner must take a “reasonable” salary out of the company, but the rest of the profit can come out as distribution, which saves the payroll taxes.  That’s potentially a 15% + savings on the distributions over the wages.

The final version of the Unemployment Compensation Extension Act of 2010 passed both the House and the Senate with a provision that forces the recipient to pay self employment taxes (payroll taxes) on all distributions made from an S corporation.

The Unemployment Compensation Extension Act of 2010 was a 50,000 plus word bill when it left the Senate for the President’s desk.  Mysteriously, the bill that the President actually signed was a mere 1,298 word bill. (more…)

I correspond with my students all the time.  Here’s the exchange to a recent question on AB Trusts and Revocable Living Trust Documents.

Dear Lee,

I purchased your course last December and we have spent a lot of time studying your course and trying to determine applications for our situation. It has been very helpful to my husband and me. Thank you.

Question:

We already have a living revocable trust. As a result of your information, we have been updating and funding our trust. We do not think our trust has provided the A and B parts where each of us owns stuff in a her and his side, thus allowing the tax savings to our heirs.

Response:

You called it a double whack. The AB trust trick is for the estate taxes.  The trust trick of owning property for husband and wife in separate trusts for asset protection is different than the AB trust.  You probably don’t need the AB trust, at least not for the next 2 years with a total estate tax limit at $10 million for a couple, even without an AB trust. The AB trust is the double whack.  The his and her trust is a totally different concept.  If you are in a community property state the his and her trust won’t do you any good anyway.  So the his trust and her trust trick for asst protection depends on which state you live in.

Comment:

The attorney who set up our trust has not responded to our phone calls. Then I heard you say that one does not want to work with an attorney who will not return phone calls. .  (In fairness to this lawyer, the assistant did respond to us initially by sending us documents that allow us to fund the trust.)

Response:

Absolutely not.  They should have given you all that paperwork in the first place and taught you how to use it. (more…)