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So you`ve finally done it: you started your own business. You`re making money and feeling great, maybe even enough to buy that new car or home you`ve been coveting. But wait! What about Uncle Sam? Doesn`t he want his cut of your new pie?

Of course he does. And, that guy who wants to sue you for all you`ve got because your product caused his little girl to cry wants his share as well. What`s a small business owner to do?

Loral Langemeier, author of The Millionaire Maker (probably the best hands-on wealth strategy book written to date) has experienced it all, and continuously comes out the clear winner - completely legally.

It turns out that you can, too. But you`ll have to get some help. In her book, Loral explains what she calls the Wealth Cycle?, a process that`s used by millionaires who want to keep the money they make.

A key part of the Wealth Cycle is what`s called "Entity Structuring." That is, structuring your company as a legal corporation or company and telling the IRS how you want to be taxed.

What you might not know is that these legal entities were created as much for you, the little guy, as for the big corporations. That`s why if you want to be a millionaire, you need to know a thing or to about entities.

Protecting your butt while saving your bucks

These legal entities are simply business and tax structures. This includes corporations, LLC`s, and Partnerships. It does not include the sole proprietor. Entities have two components to them: the legal component and the tax component. The legal component determines how your business is structured. The tax component determines how the IRS will tax your company.

Let`s take an example. You`ve probably heard of a "C corporation", right? This is a business that has decided to structure itself as a corporation and be taxed under Chapter C of the IRS tax code. An S corporation, alternatively, is a corporation that has chosen to be taxed under Chapter S of the IRS tax code. (See why you`ll need help?)

Entities are not something you have to use, but smart business owners, even and especially sole practitioners, do use them.

Why? Say that someone decides to sue your business. If they win and you`re not a legal company or corporation, they can get your house, your car, and pretty much everything you own. If you ARE a legal entity, all they`ll get are the assets of your company.

The best part is that if you`re doing it right, your legal entity won`t have many assets, and you`ll keep more of what you earn. Tax benefits are pretty straightforward. The more of them you have, the more you keep of what you earn. The IRS gives corporations bigger tax breaks by allowing them to write off a lot more expenses than individuals.

It`s not necessary to know all the details about entities - that`s what your accountant and lawyer are for. But you should certainly get familiar with your options so you can start managing your life like a millionaire does. "Doing so will be one of the first steps on your journey to millions," says Loral.

Can you really become a millionaire simply by having a corporation? No, you can`t. In her book, Loral provides numerous examples of how people use entity structuring to protect themselves and keep more of their money.

If you DO want to make millions (or at least a lot more than you`re making now), be sure to create, as Loral says in The Millionaire Maker, the right entities at the right time. The Wealth Cycle is your real key to success.

Wealth building is possible for anyone who learns and uses the right skills at the right time. Creating sustainable wealth does not need to remain a mystery. Sid Smith writes and serves as a Financial Consultant, helping people turn their small businesses into profit.

Article Source: http://EzineArticles.com/?expert=Sid_Smith

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