Incorporating: Fringe Benefits

Your corporation can offer a considerable dollar amount in fringe benefits to you. These benefits are not taxable to you. Without your corporate benefit, you would have to purchase these benefits with after-tax dollars.

Insurance
Your corporation can purchase health insurance for you and your family. The premium is tax deductible to your corporation and the benefit is not taxable to you.

Automobiles
As long as the automobile is used for business purposes and not simply commuting, the value of the automobile is tax deductible. Additionally, the gas, maintenance and insurance are tax deductible.

Loans
One way to get money out of your corporation without currently paying income taxes is by borrowing the money from the corporation at a fair rate of interest. If you receive money as a loan, you will have to pay it back someday, unless the corporation - that you control - decides to forgive the debt. If the corporation decides to forgive the debt, you will have to pay tax on the amount forgiven. In the meantime, however, you can use the money without having to pay income tax on it.

Paid Vacations
f you arrange to conduct your business in places you would like to visit, the corporation can pay for the trip and deduct the portion of the trip that is applicable to the business purpose. For example, if you would like to go to New Orleans to eat Cajun food and listen to Jazz music, you can go there at a time when you can attend a seminar or trade show that relates to your business. The trip to New Orleans as well as the cost of hotel and food would be tax deductible.

Day Care
Your corporate benefits package can also reimburse you for day care expenses. This additional benefit is deductible for the corporation but is not taxable to you.

Other Benefits
These are just some of the many not taxable benefits that you can receive from your corporation. Other benefits include educational benefits, scholarship programs, deferred compensation, travel and entertainment, and retirement plans.

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