How Nonprofits Can Make Founders Wealthy!
VIDEO TRANSCRIPTION – How nonprofits can make founders wealthy! Secret tax advantages only nonprofit owners know. Hi, I’m Steven D. Cooper, your master tax strategist with Coopers Accounting Service, because your financial freedom matters.
If you’d like to learn more great tax tips, download our financial guide as well on our website, your financial freedom matterrs.com or click on the link below this video. I’m going to give you a few examples.
How one can leverage a nonprofit. One way is through retirement, where people can get money. One example, an ED, executive director, let’s say he or she gets a two million dollar grant.
And in that grant, they get 10%. So that’s $200,000. They said, well, Coop, don’t need the $200,000 going on the payroll. Okay. So let’s put $50%, $100,000, and we put the other $50%, $100,000 towards their retirement.
So several of our clients have where the government, federal, state, county, or municipality, local governments, they’re funding their retirement plan. Number two, which is a short story. Our largest client that gross is $21 million last year.
One of the clients pass has a brother who’s a pastor of a church in the Philippines. She wants to give him $50,000. Okay. You don’t give him the $50,000 out of your personal account. You put the $50,000 in your foundation. Then let the foundation wire it to your brother.
It is more traceable and cleaner on that end. Some people are not aware of the simple fact that the nonprofit in certain countries where the United States does not it doesn’t have a clear relationship with them can create problems, which leads to the other potential issue. I have a client that wants to give money to his family in Mexico.
Wind up getting just drilled. They was in my office, getting drilled by the Mexican bank to verify that this money was legitimate money going to his family, not going towards drug money or not going towards buying guns. Go figure on that. Last thing.
For the client that made $21 million, their net income was $2.2 million. So $500,000 went to one partner’s nonprofit. The other $500,000 went to the other nonprofits partnership.
As a result of this, their taxable income was $200,000. So one partner paid taxes on $100,000. The other partner paid taxes on another $100,000. We just saved them in federal and state income.
Taxes close to a million dollars. This is what makes the difference between a tax strategist and a tax advisor. We strategize on how to leverage the money legally to reduce a client’s tax burden. Also, by putting money into the nonprofit, the clients can then turn around and seek grants as well for the services that they render and how they benefit their community.
For more easy financial tips, sign up for a financial tip newsletter by going to your financial freedommatters.com or click on the link below this video or download our financial guide as well.
If you’d like a free 20-minute smart money consultation, give us a call at 562-436-2600. Well, again, I’m Steven D. Cooper, your master tax strategist, also known as Coach Coop, with Coopers Accounting Service.
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