mymdxis coming,this is a business lease and I am "paying down" with before tax dollars
This means that on my business tax return I deduct $7140 per year plus insurance and operating expenses (gas, maintenance,etc.) for the MDX.you said that the "The $ 595 per month is fully deductible" ... can take that for what it means ...?
NO, not saying this at all. This would only be true if someone was in a 100% tax bracket. As an example, in a 30% tax bracket, my "effective" cost of the lease is only $5000 per year. You have to compare this to the fact that you are going to have to buy or lease something to drive anyway. If I were to personally buy or lease this MDX it would be with dollars I had already paid taxes on, social security and medicare, plus the matching company SS and medicare I would have paid.so your saying that over the course of 4 years ... you would have gotten back your $28,560 in taxes ...?
We are an S corp. There are no retained earnings allowed to be carried over at the end of the year. Taxes are paid on the individuals rate. However, the year's earnings are not subject to SS or medicare taxes. Therefore you pay yourself a salary that you can get by on each year and save the SS and medicare taxes and matching contributions on the year end profits. This amounts to 15.3% a year. (7.65% personal and 7.65% company matching). Another "break", I'll call it, is a SEPP plan. I can have the company put up to 15% of my pay in a plan like an IRA. It is not taxable to me until I withdraw. The amount can vary any year I want it to. The 15% is a maximum. This is not a payroll type deduction. It goes straight from the company checking account to Morgan Stanley, the plan administrator.please answer that for me ... and if possible explain some of the other major breaks you get for owning your own business ...
To my knowledge, no. A company can even loose money every year for a certain period of years before it is required to be profitable according to IRS. It's been a long time (years) since I've seen those requirements, so I'm not real sure what they are. We have been profitable from day one for 16 years with revenues increasing every year, so this doesn't apply.also do you have to "net" a certain amount to get these breaks on a lease .