The Company Package Mike finally took plunge last year and left. He ended up becoming a partner in his friend's restaurant.

With no experience in this field he embarked on a huge learning curve.

He went from a boring yet very cushy 9.00 - 5.00 p.m. job with a regular income to working 9.00 a.m. - 9.00 p.m. seven days a week with barely any income. However, Mike was on fire. He was excited. He was living life (or so he thought). That was 10 months ago.

I caught up with him this week and he told me he is selling his share of partnership. He realised that there was more to running a business of your own than working for someone else. The pressure on him had taken it's toll. He had been getting heart palpitations and couldn't sleep. The stress of it all was too much.

The Moral To The Story Mike had leapt out of his comfort zone and took a risk. Although in this instance, he found out it was too big a price to pay, he wouldn't have known whether or not this was going to work out until he tried it. Of course he had done all his due diligence beforehand, however that's still no guarantee that he had made right decision.

What Mike has learned from his experience, is that there is a world of opportunity out there and sometimes you win and sometimes you lose. But you'll never know unless you give it a go.

He's still excited about possibilities for his future and is grateful that he had guts to take action.

The Final Word If you want to become more or do more with your life this year, what investment are you prepared to make in your own self?

What resources, courses, support do you need so that you can be excited about getting out of bed in morning?

Are you healthy enough to jump out of bed in morning? Are you healthy enough to cope with your life?

If you want to change then make sure you take action today!

Lorraine Pirihi

If you already have a profitable business, start another one to diversify, and to shield taxes from profitable one.

If you don't have a Home-Based Business, start one today.

4. Employ Your Children

For a taxpayer who has a business, he or she can hire their children to work in their business. As an example, you put your daughter on payroll for 12 hours a week and pay her $7.00 hour. This would equal about $4,300 per year. She has to have real duties to perform and a record should be kept of her activities.

The advantage is salary would be deductible from your business, in effect eliminating $4,300 of income from taxation. And if business is unincorporated, no social security taxes would have to be withheld and paid for your daughter's earnngs. In addition, you don't lose exemption for your daughter ($3,000) if you continue to provide over half of her support, and it is assumed that your daughter has no unearned income.

If your daughter can be claimed as a dependent, no tax will be due on her income, as it is under $4,700, standard deduction.

5. Pension Plan Contributions (HR 10 Plans & 401(k) Plans)

Whether you are self-employed business owner or employed, pension plan contributions are a good long-term tax shelter.

You can contribute a lot more to HR 10 Plans than to IRAs. Money Purchase Plans permit larger annual deductible contributions-up to 20% of self-employment earnings, up to a maximun deposit of $35,000. Profit-Sharing Plans provide a limit of 13%, up to a maximum of $25,000. Contributsions grow tax-deferred until retirement.

For employees, 401(k) Plans have become most important source of retirement savings and one of largest sources of tax savings.

For 2002, employee contribution limit is $11,000 and catch-up provision for employees age 50 and above is $1,000.

Many companies match a portion of employee contribution and employees should take advantage of these matching amounts and contribute amounts above such levels if they can do so.

Above you have five ‘Superb’ long-term tax shelters.

(c) 2003

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Roger Staubus CPA is editor of "Tax Tips For You e-Zine" and author of "77 Strategies For Slashing Your Income Taxes." To Subscribe to “Tax Tips For You e-Zine,” send an email message to roger@taxtipsfy.com, and put Subscribe in subject line.

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