Lawyers can Receive the Benefit of Leverage

If you use the profits from your cases — your own money — to finance your next case, you’re using after-tax dollars. The IRS sees that money as pure profit, but if you’re trapped in a cycle of continually tying up your income in the next case, it’s really operating capital that is not tax-deductible. A business loan not only breaks that cycle, but lowers your tax burden. That’s because loan payments are generally tax-deductible as a business expense, so you’re using before-tax dollars to fund your case. That translates to more profit for you to run and expand your business, invest elsewhere, or just to enjoy.