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Government regulations and higher taxes have tightened the vice on many small business owners in the United States. S-corporation partners are bearing the brunt of a 4.6 percent hike on their personal income taxes (from 35 to 39.6 percent). Meanwhile, long-term capital gains taxes have risen 8.8 percent (5 percent plus the 3.8 percent Medicare surtax) to 23.8 percent for 2013. Add to the mix all the new federal and state business regulations governments are enforcing, and the path to prosperity for small business owners has become as challenging as ever.

The cliche says to diversify your portfolio, and this pertains to cash flow for your business as well. Your profits and investments can and should include precious metals, particularly gold and silver. Investing your profits beyond the US dollar is not only a sound strategy, but can save you a bundle in taxes and provide potential high returns.

The Bullion Tax Exemption

Most people who invest in gold and silver buy exchange-traded funds (ETFs), also known as precious metal stocks. ETFs have the advantage of not passing on the burden of storage and security of physical metals. But any long-term gains made on your ETFs will be subject to capital gains taxes at the end of the year. Contrarily, bullion purchased from US Money Reserve and other providers is exempt from said taxes. Title 26, Section 408(m)(B) of U.S. code provides this exception for, any gold, silver, platinum, or palladium bullion of a fineness equal to or exceeding the minimum fineness that a contract market requires

Why Precious Metals?

The prices of both gold and silver have been relatively steady in the past year. Both metals, however, increased in value by over 500 percent in the last 10 years. The large increases in value are directly tied to the Federal Reserves policy of quantitative easing (printing money) and subsequently buying mortgage-backed securities and Treasurys from the government. The housing bubble of the mid-2000s, the bailouts of 2008 and 2009, and the current QE3 policy of the Fed have shown its pattern of consistency with this process.

Small business owners can take advantage of all the aforementioned market conditions by investing profits into precious metals. It will ultimately lower your tax bill and diversify your balance sheet.

The Future Is Bright

Gold fell to a six-month low as of late February, dropping below the $1,600 per ounce mark for the first time since August 16. These developments have caused panicked selling among some investors, but should be viewed as a golden opportunity for chief executives. The global currency wars were the hot topic of debate during the February 16 G20 summit, and many investors believe the drop in both gold and silver prices is a direct result of these monetary tug-of-wars.

Small business owners should view these price fluctuations as market norms. Monex.com is still confident in gold as a long-term investment. Euro Pacific Capital CEO Peter Schiff, who correctly predicted that gold would rise substantially throughout the 2000s, is also standing by his prediction of $5000 per ounce gold within three to five years.

 Is gold really the golden opportunity for small business owners like you? What are the pros and cons when investing in precious metals? Tell us what you think.Please add your comment below.