Reducing Your Tax Burden When Selling Your Business With Crystal Stranger [Ep.148]

Dec 12, 2023

Crystal Stranger, tax expert for business owners, shares savvy tricks entrepreneurs can use to shrink taxes and pump up profits when selling their businesses. She discusses common tax blunders, the importance of structuring your business to cut down on taxes, and the complexities of sales tax and nexus rules in e-commerce. Crystal also explores the benefits of the qualified small business stock (QSBS) deduction and the difference between stock sales and asset sales. The podcast emphasizes the significance of due diligence in business transactions and recognizing the need for help in growing a business.

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Introduction

00:00 • 2min

Crystal Stranger and Clear Tax

02:07 • 16min

Tax Implications and Nexus in E-commerce

18:30 • 22min

Exploring the Benefits of the Qualified Small Business Stock (QSBS) Deduction

40:16 • 2min

Stock Sales vs. Asset Sales

41:57 • 18min

The Importance of Due Diligence and Buyer Responsibility

01:00:19 • 2min

Recognizing the Need for Help in Growing Your Business

01:01:58 • 2min

Reforming and Growing Your Company, Buying/Selling Profitable Businesses

01:03:42 • 2min

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Nothing is certain except death and taxes.As a business owner, taxes are a double whammy—they affect both your personal and business life.

Imagine working hard to build a business that’s set to change your life when you sell it, only to watch taxes eat away at your profits.

Thankfully, there are savvy tricks entrepreneurs can use to shrink taxes and pump up profits when selling their businesses.

That’s where Crystal Stranger comes in. Crystal is the Partner & COO of Cleer Tax, a company that helps US businesses and entrepreneurs navigate their taxes.

In this episode, Crystal joins us to discuss the various strategies entrepreneurs can use to reduce the amount of tax incurred when building and selling their online business.

She unpacks the most common types of taxes that businesses encounter and how to structure your business to cut down on the taxes you have to pay.

Crystal also exposes the big tax blunders many business owners make—like skipping tax filings or setting up shop in high-tax states. According to Crystal,

“A big mistake I see entrepreneurs make is using state addresses for vanity reasons, like having a California or New York address to make their business look established or cool. Some entrepreneurs also sign up for mailing addresses without specifying the location. Putting these addresses on your website, invoices or communications can create large tax liabilities in those states.”

We also dissect the differences between an asset sale and a stock sale, with Crystal explaining how a stock sale can save non-US business owners massive amounts of money!

You might not dodge taxes completely, but armed with the insights from this episode, you can certainly trim your tax bill and safeguard your hard-earned profits!

Topics Discussed in This Episode:

Crystal’s background and how she ended up helping entrepreneurs with tax (02:23)
The most common types of taxes that businesses encounter (06:08)
The differences between LLC and C corp (09:45)
Structuring your exit as an e-commerce business owner (12:23)
How the Nexus tax system works for sales tax (19:26)
The common tax mistakes entrepreneurs make when selling their business (31:09)
Stock sale vs asset purchase (36:14)
The best way to use the proceeds of your sale to grow another business (45:49)
How tax applies to Hold Co businesses (51:14)
How sellers can make their business more attractive from a tax perspective (54:46)

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Sit back, grab a coffee, and learn how to reduce your tax liability and maximize your profits!