FOR IMMEDIATE RELEASE

CONTACT:
Robert J. Greene, CPA, CMA
Phone: (845) 889-4439
Fax: (845) 889-8161
cpa1@hireyourspouse.com
http://www.hireyourspouse.com

Missed Tax Opportunities Cost Entrepreneurs Thousands Every Year

Scattered throughout the tax code so widely that it took ROBERT GREENE, CPA,CMA years to find them all are obscure loopholes that allow self-employed business owners tax deductions that can add up to as much as $25,000 annually. Could it work for you?

In a 1994 private letter ruling, the IRS allowed a self-employed professional to hire his/her spouse as an employee and provide medical insurance to the spouse and the spouse's dependents as an employee benefit, 100% tax deductible and at no tax cost to the employee/spouse. One significant requirement: a contract between employer and employee/spouse must be in place beforehand to document and define the employer's contractual obligations and the employee's job responsibilities.

 But medical benefits, says ROBERT GREENE, CPA, CMA and the creator of the Spousal Employment Contract (SEC), are just the start. Several years ago, Greene began searching for additional tax advantages for using a formal spousal employee contract. What he found saves his own home-based accounting practice about $5,000 taxes annually. But it's not a tax do-it-yourself program.

"You can't just put your spouse on the books and start writing everything off," says Greene, "but with a Spousal Employee Contract that meets specific IRS guidelines, you can start adding up the benefits."

Greene's Spousal Employment Contract (SEC) has specific benefits in 16 different categories. It took several years to finalize, bringing together many technical points scattered throughout the tax codes, and is rigorously kept up-to-date as tax law changes. Many of Greene's clients have saved thousands over the years using the SEC, with no attention from the IRS. That's because the SEC is 100% according to code. In fact, every paragraph in the contract is carefully referenced to the specific section of tax codes that it relates to.

The contract documents the relationship, responsibilities, compensation and extensive employee benefits. Without the contract, this kind of arrangement isn't legal and won't work. But with it, the tax savings are impressive.

Here are some of the deductions, big and small, made possible with the SEC:

The Big Stuff:

Medical costs: "Medical insurance is worth about $6,000 annually, but that doesn't include the value of all other medical costs for an employee and dependents," says Greene, who offers his employee and her dependents both medical insurance and non-covered medical costs as health care benefits. That means all eye care and products, all dental care and products, mental healthcare costs, chiropractic, even holistic or alternative medical treatments, and more.

On-Premises Facilities: Big companies have on-site athletic facilities for employees - and they are equally valuable for small companies too. This can feature big items like exercise equipment or a swimming pool or small ones like a bat and a glove.

Home Security Systems: Almost every home business has an electronic security system, but most owners only deduct the pro-rata portion, which is correct, but only covers a small fraction. A business with a SEC employee can have the business pay for the entire home security system – installation, maintenance, service, etc. – as an employee benefit – and is allowed to write off 100% of the cost.

The Small Stuff, or "De minimus":

These are items that the IRS considers too small to ask any business taxpayer to account for, regardless of the company's size. But what's small for a multi-national corporation adds up fast for a home-based business economy. Examples:

Food: Coffee, juices, snacks and other food items that an office might typically offer to employees. Buy these items for your SEC employee and it's a fringe benefit: deductible for the business and cuts grocery bills.

Occasional supper money: This can be reimbursed or provided in kind for SEC employees to enable him/her to work overtime. Note that this is NOT entertainment, which is only 50% tax deductible, but an employee fringe benefit: 100% deductible.

Occasional entertainment: Tickets to theater, sporting events, comedy clubs, concerts, are a fringe benefit, just as an employer in a big firm would buy season tickets and give them to employees as a special thank you for a job well done. That usually includes transportation and dinner.

Holiday and birthday gifts and parties: Traditional holiday gifts of property with a low fair market value are fair game for SEC employee fringe benefits. And it's not just the Thanksgiving turkey either. No one can tell you what holidays your office can celebrate. Every month contains at least two holidays, and every employee has a birthday. Birthday gifts are also fully tax deductible, whatever the gift might be.

"Spousal salaries tend to be on the low side, so you'd expect nice gifts or benefits from your employer," says Greene. "Once it's set up, using the SEC lets you take advantage of legitimate tax law to save thousands of dollars without working harder or selling more."