Another Tax Loophole

Just image, you are a small manufacturing company, business has been good, but yesterday you received a call from a customer who wants 50,000 widgets in 45 days. The customer is a large account and if you turn the business down, he may never call you again.

Problem: You need to hire more staff to meet the manufacturing needs of this customer. AND the customer said nothing about an advance payment. In fact he mentioned that he would be paying net 30 once shipment was received.

You need working capital and you needed it yesterday

You sit down and you start to think. Well let's see, it will take much needed time to apply to the bank for a loan, your wife threatens to leave with the kids if you refinanced the house one more time for business reasons and your credit cards are maxed out.

As you look around your messy yet effective office you wonder where you can get the working capital you need?

Sitting in front of you is your secretary mailing out invoices. You slowly walk over to her desk and you ask "What's the total amount of invoices that we have outstanding at this very moment?

Your secretary looks on her computer, moves the rat around a few times, clicks a couple of times, and then hits something that makes the printer start singing. She looks up at you with those "I want a raise" eyes" and says, "it's coming out on the printer"

You walk slowly over to the printer and pick up the sheet of paper. Just when you think you are ready to read and understand the page another page prints. She says very softly, "the second page will give you the total" You pick up the second page and allow your eyes to scroll down to the bottom of the page and much to your surprise the total amount is well over $300,000.

You don't want to call a Factoring company because, they will discount your Invoices and you won't get all your monies OR do you?

Your secretary reminds you that all the fees for Factoring the Invoices is tax deductible and in the end the Factoring will cost you nothing. (Your secretary is taking tax classes at night, something about becoming more valuable to the company and earning more money) She also reminds you that you can Factor the Invoices and be paid up to 92% of the total invoice amount within 48 hours. Plus, the Broker does not charge you.

It is at this point that you try to remember why you married your wife instead of your secretary?

You quickly change from that thought back to who should I call? There are so many Sharks in the water and about $200,000 of the invoices are Government Contracts.

You know you need a Factoring company whose rates are fair and who can deal with the endless paperwork that the Federal Government requires to Factor one of their Contracts.

Needless to say, he called me; the names have been changed to protect the guilty.

This article was written by C. Ingraham, Broker for Government and Corporate Invoice Lines of Credit at http://www.taxeswilltravel.com

In The News:

A Tax-Cut Idea for Trump  The Wall Street Journal
Resources Available to Help You Survive Tax Season  Fairfax County Government NewsCenter

IRS Lock-In Letters ? What?s An Employer To Do?

Employers often ask employees to designate the amount of tax... Read More

Identity Theft ? Impacting Your Taxes?

If your identity is stolen, your finances can quickly become... Read More

IRS Obtains More Than 100 Injunctions Against Tax Scheme Promoters

The IRS has obtained civil injunctions against more than 100... Read More

Tax Tips to Save Money on Taxes - Get the Corporate Kick and Save Loads of Money

Why a Corporation Helps Save You TaxesThe Tax Rates (Notice... Read More

Access to E-records by Taxing Authorities: A Case for Pakistan (Part I)

Background issues of access to recordsTo assess the records at... Read More

Tax Help Secret: Avoiding the Entreprenuers Curse

Your days as an entrepreneur and businessperson are consumed with... Read More

Save Money on Taxes - Let Uncle Sam Pay for Your Fun!

"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More

Are You An Innocent Victim of These Popular Myths?

Misconceptions, misinterpretations and just plain "untruths" are floating about income... Read More

Tax Strategy - Let Washington Pay for Your Corvette, Porsche, or Air Plane

Deducting Your Auto ExpensesAuto deductions are a very complex topic.... Read More

Employment Taxes ? Depositing With The IRS

If your business has employees, you must pay employment taxes.... Read More

Employment Taxes ? What Are They?

If you have employees, you are responsible for paying a... Read More

Small Businesses: Company Car Vs. Personal Mileage Reimbursement In Hurricane Katrinas Wake

With gas prices at an all time high before Hurricane... Read More

Tax Records - What You Should Keep And For How Long

Many taxpayers are confused about how long they should keep... Read More

Tax Trap #1 -- Waiting to Incorporate: What A Difference A Date Can Make

NOTE: This is the first in a series of 5... Read More

Highlights of IRS List of 2005 Tax Scams

Each year, the IRS lists various scams taxpayers get caught... Read More

Business Tax Deductions

As we enter mid-March, taxpayers begin to become very interested... Read More

Know A Tax Cheat? Get Paid To Tell The IRS

According to the IRS, taxpayers underpay their taxes by some... Read More

Tax Investigation - What You Need To Do

The knock on the door from a Tax Inspector is... Read More

Corporations Failing To Claim AMT Exemption Overpay Taxes By $11,000

Does your incorporated business pay alternative minimum tax ["AMT]? If... Read More

Need a Copy of Your Tax Return Information?

Taxpayers have two easy and convenient options for getting copies... Read More

Back To School ? Educators Deduct School Expenses

As teachers and students head back to school following a... Read More

How to Check the Status of Your Tax Refund Online

So, you were pleasantly surprised to learn that you are... Read More

Knock-Knock-Knock

Knock-Knock-KnockWho's there?The IRS!The next quarterly payment of estimated income tax... Read More

Estate Taxes - It Pays to Plan Ahead

Estate taxes. It's not enough to simply know they exist,... Read More

SFR Substitute for Returns: IRS Action on Non-Filers

In the latest Star Wars episode, the evil empire executes... Read More