The Myths Behind Taxes & Growing Your Business

I can't tell you how many times I thought reducing my income down to pay as little tax as possible was the right approach until I realized I was hurting my business.

For many years as a solo agent I would maximize deductions and minimize income shown on my taxes in order to "keep" more of my money throughout the year.

This approach was helpful because I was able to build cash reserves and use the money I had to invest in my business.

Whether that be courses on improving my skills, new photography equipment a larger advertising budget or just more money to spend at my leisure.

It wasn't until I tried to purchase properties, take out business loans or grown my business that I realized I had been hurting myself and my business.

You see by showing less income I was making myself less appealing to banks and lenders.

They wanted & needed to lend to businesses and people that had a history of consistent income and an ability to payback the loans and the income to back it up.

Sure I had cash on hand but I had no "proof" of how I was able to obtain that cash because I was deducting my income down to keep it.

Once I realized my self imposed limitation I made a few changes.

I hired a CPA to do my books and set up a bi-weekly payroll. Then I reported more income every year tax time came around and before long I had tripled the amount of income I was showing.

When it came time to purchase investment properties I was approved instantly. I had no problems acquiring loans for my business and was able to refinance existing business debt and build larger cash reserves for future growth.

In the end I could have stayed small and showed little income and kept more of my money.

However, that didn't align with my goals to grow and build wealth.

By paying more in taxes I was able to play the game and present myself as a better candidate to the banks and remove my self imposed limitation.