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Tax Planning/Medicare Premium increase

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Question
Hi Richard.  I am 67 years and have been receiving medicare benefits since July, 2013.  I am still working at my own small business.  When I called Social Security about continuing working, I was told "that's okay.  If you contribute more, your monthly check will be more."
Surprise, surprise.  I received a letter from SS telling me that based on my 2013 income, my Medicare premium will increase, which decrease from $657 to $444.  Both figures include the Medicare deductions.  I don't understand.  Is there anything I can do, short of going out of business.

Answer
Incorporate the business, and quit taking so much salary.

This would have numerous positive effects. First, you would not be paying personal taxes AND self employment taxes on all the income that the business creates. Corporate Tax Rates are much lower. Second your personal tax return would be far simpler and drastically reduce your potential for audit. This would require a corporate return, but the Corporate Return is relatively straight forward and also has a very, very, low potential for audit. Allow for succession much easier. Possibly improve client perception of your business now being bigger, more formal and substantial. And the list goes on.

Lower taxes, better treatment in your retirement, reduced exposure to audit, and something to hang on the wall as an accomplishment.

This isn't a complete answer but it is an introduction to the direction that you should go. Please call me with all the questions, and you probably have many. You may have been told things, or thought things, that do not align themselves with what I have suggested above. Let's talk them through.

Tax Planning

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Richard Fritzler

Expertise

I am in the business of tax planning for business owners. Our company helps business owners structure so that they can be reduce the taxes that they owe, making them far more profitable.

Experience

Since 1986 I have been helping successful business owners reduce taxes, protect assets, and limit their liability. The company is Owelesstax, incorporated at www.owelesstax.com


Organizations
National Small Business Owners Association.
Nevada Association of Listed Resident Agents.
Citizens Legal Association
The Business Owners Institute

Publications
Contributing author to "The Corporate Standard Newsletter".
I am also a writer for an email newsletter about business
Googlegroups/Successfulbusiness
I am also an Expert in the areas of Tax Law, Retirement Planning, and Estate tax issues.

Education/Credentials
I have been in the business of assisting business owners in reducing their taxes and liability for over 17 years. Providing retirement option that are not just tax deferred, and not limited to a "token" tax free contribution. Retirement plans that allow for total and complete access before you are 59.5 with no penalties

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