I was shocked when I read in Forbes Magazine that an estimated 80% of this year’s college graduates will return home to live with their parents. This is a disaster. Not only for the parents who should be saving for their own retirements, but for the graduates, who should be independent.

The sad truth is that if you don’t enter the workforce right after your graduate, it is difficult to get a job. The reality is that employers, when they are hiring, go after the new graduates, or workers with experience. Sitting home at the parent’s house will not give these graduates experience.

Parents cannot afford to continue to support their children forever. Congress is considering helping pay the student loans of all these non-working kids, but the real issue is to get these graduates working.

My grandfather used to say that “hard work and discipline are the way to open up opportunity and success.” Encouraging boomerang kids to start their own businesses, will open doors for them, helping them to find future opportunity and success.

This generation possibly includes the brightest and most creative people in the United States today. Let’s not waste their potential waiting for a government handout or a job that may never come. Let’s encourage them to create their own companies and determine their own destiny. To start an LLC is probably the easiest and safest way to get started.

The LLC Wizard is designed to help fledgling entrepreneurs set up and run their own LLC (Limited Liability Company). The LLC will act as a safety net to protect the creators of the company in the event the company isn’t successful.

Imagine what all these college graduates living in Mom’s basement could do, if they put their talents to work finding solutions for the needs in our society. These kids have the education and talents to do this.

• Service of Process—which is the paperwork that notifies you of a lawsuit
• State mail —  annual reports or statements
• Tax documents

The registered agent is required to have a physical address (not a post office box) in the state of incorporation and be available at the address to receive communication and give it to you.  You can act as your own agent and that is often the best choice.  Too often when you choose someone else there is a significant delay in receiving legal notices. If you get your own notices you can act on them immediately.

Uncertainty is the name of the game in politics. It’s killing business. There is one thing that is certain however. If something doesn’t change quick, the largest tax increase in history will hit us on January 1, 2013.

Yes, ObamaCare is huge, but when you couple it with the expiring tax laws, you will be brought to your knees. Every household in the United States will be facing an average of $3,800 in extra taxes next year. By the way, that does not include any of the health care penalties people will get hit with when they don’t buy the right insurance.

It’s the Middle Class

I know that you aren’t the “average household” in the United States. You may not think you are rich, but your chances of having to pay the alternative minimum tax are pretty good. Seventy percent of the over $500 billion in extra taxes due in just 2013 will be paid by the middle and low-income families.

The politicians are screaming to tax the rich, and they are smirking behind your back, because they know you’re going to get killed next year. The tax will directly affect your paycheck every time. You will see an immediate drop in your take-home pay.

The child tax credits will be cut in half, the lowest tax rate will not be 10% anymore, and more people will be included on the tax rolls.

Die this year, not next year. Now you can die and pass $5 million without a federal estate tax. If you die after December 31, you’ll only get to pass $1 million to your family without a federal estate tax. The tax will start at 45% and quickly move up to 55%.

The 3.8% Passive Income Tax

A 3.8% health care surtax will be placed on ALL investment income if your adjusted gross income is over $250,000 for couples. You just dismissed that tax, because you don’t make over $250,000. Not so fast.

The tax may not apply today, but it will in the future. With inflation, your money won’t be worth as much, and your salary will have to increase if you are going to survive. That means technically you make more (maybe over $250,000?). Ok, let’s assume your salary will never hit $250,000. You’re still not home free.

I am worried about the politicians lying to me. When the income tax was instituted in 1913, it came in at only 8.5%. The President and Congress in 1913 swore that it would never go up. Within four (4) years the income tax hit 70% (seventy percent) for the highest income tax bracket.

The next step in the current tax strategy is to lower the $250,000 threshold. It’s easy to see that one coming! And, it’s easy to do, because that’s not even a new tax. Congress won’t even have to debate it.

Kick the Can Down the Road

I don’t see Congress, and I certainly don’t see the current President, worrying about the tax issues between now and 2013. They’re all worried about campaigning. There will be lots of name calling and finger pointing.

I did love the President’s statement on April 10th that prosperity comes from the poor. It doesn’t trickle down from the rich. (He actually said, “Prosperity has always come from the bottom up.”) If he can tax the top half, he’ll get the vote of the bottom half. My students aren’t in the bottom half. Beware!

Remember, the IRS is the major threat to your wealth. It’s your biggest asset protection problem you have by a factor of ten.

Democrat or Republican – it doesn’t matter –we just need to get people in Washington that understand our need for tax relief. By tax relief, I don’t mean lower the taxes we have today. Our taxes are basically very low today, but they won’t be for long unless we get the relief I am talking about.

One of the principal causes of the Great Depression was a huge tax hike from the relatively low rates enjoyed in the Roaring 20s. What will the 2013 tax hikes (many are the lapse of the Bush tax cuts) plus the huge burden coming with ObamaCare do to our fragile economy?

In the next few weeks, I’ll give you a number of tax tips that will help this year. Enjoy the year. 2013 is set to be really bad, unless you make enough noise to change the current course in Congress.

Get my 10 Tax Tips NOW and hunker down for the battle.

US Supreme Court Counselor

Limited Liability Company or Incorporation? Clients often call me to find out whether it is better to form an LLC or Inc. They want to be certain that they will get all of the good asset protection and tax advantages they can for their company. As with everything, there are several important considerations that you should take into account to get the right structure for your business.

Business Structuring

There are many types of business structures available. There are sole proprietorships, partnerships, LLC, LLP, C and S Corporations. The best way to decide which business structure you should form is to consider asset protection, taxes and ease of management. In the LLC Wizard there is a company decision chart to help you make certain that you make the best choice. Generally an LLC works great for most people. It is quicker to form and easier to maintain an LLC and you get just as much asset protection.

Another bonus is that you can elect how you want to be taxed. The IRS lets you choose. The best part of the LLC is the double asset protection you can get if you make the correct choices in your structure and choose the correct clauses in your documents. Make sure you have a good Operating Agreement. This is the heart and soul of your business.

In the last year the IRS has been targeting S Corp owners who take low salaries so they can receive the bulk of their income in corporate dividends, which are not subject to payroll taxes.  These cases are being found and prosecuted.  The Courts are standing behind the IRS and ruling that this is indeed a tax sham.

The case cited is an accountant who took a $24,000 a year salary.  His share of the annual profit was $200,000.  The court agreed with the IRS that his pay was unreasonably low.  His salary was reclassified and he was hit with payroll taxes and penalties.

Don’t be a turkey! If you have an S Corp and your salary is unreasonably low for 2011, it may be a good idea to reconsider this plan and take a larger salary.

Asset protection is a double swinging door.  Many people tend to plan their asset protection from only the business side, to protect their personal assets if their business fails.  This is a mistake.  Of course it works just fine when your business gets in trouble.   It blocks creditors coming through the door after you and your home and savings account and other personal assets.  But what about when you get in trouble personally?  Say you are in an accident or suffer an illness and you can’t pay your bills.

When starting a business, everyone wants to structure it to protect, their house, summer cabin, bank accounts and retirement nest egg.  But if they thought about it they would realize that their business is their most valuable asset.  It is basically the source of all their assets.  When you consider asset protection you should see the value of both your personal and business assets.  Even though business owners do tons of “asset protection” trying to protect their personal assets, they need to protect their businesses too.  Many businesses are lost when a personal disaster strikes.

Business structuring using an LLC has double asset protection. Like a corporation, an LLC has all the aspects of the corporate shield, but it also has partnership charging order protection.  This gives an LLC a distinct advantage.  The LLC protects from both sides of the door.  You may be wondering, “If LLCs are so good why are corporations still the most common business entity?  It is because LLCs plus charging order protection are “relatively” new.  Corporations have always been the “standard business entity.”  People have heard of them and so they use them.   Still when you do the research you will probably find that an LLC is the best small business entity.

The question I ask is “Does this mean these self employed are barely making it or are they making more than the rest of us because they are getting really great tax benefits?”   I would like to think it is the later.   I have always said that your own small business is your best tax deduction.  It looks as though these figures bare that out.

The parents who had a six week old infant and a small child aren’t getting much sympathy. They have become a target for late-night jabs from television hosts like Jay Leno and Chelsea Handler.

Laugh if you will but the family can act as a symbol if you will of the importance of being prepared, before you enter a maze.

In the maze of business start-ups many get trapped.  More than 50% of small businesses fail with in five years of formation.  The correct legal foundation could make all the difference in your business.  What if your have the proper liability shield so that you can deflect a lawsuit?  What if you have structured your business for the most favorable tax climate?  These questions can be answered to your benefit and could save your business.  In the LLC Wizard, it is all there for you.

Usually it is easiest and least expensive to form your LLC in your own state.  You can act as your own agent and most states have made their LLC law competitive.  Florida recently had a case where a single member LLC was disallowed by the court to satisfy a claim. If you can’t form a multi member LLC in Florida you may wish to consider another state.

Does an LLC need a registered agent?

Yes you need a registered agent for Your LLC.  If you live in the state where you formed your LLC you can act as your own registered agent.  It is a good idea to be your own agent, because you do not have to pay someone to do it.  If you are acting as your own agent be certain to answer all legal correspondence by the required date or you could have serious problems.