If You Don’t Have A Home Business: Get One Fast!
Most Americans don’t know there are legitimate ways using tax deductions to keep more of your hard earned money in your pocket and it is all perfectly legitimate? Income taxes are a dirty word to most Americans, but what if you were making the tax code a benefit instead of a feared monster?
You know the reason there are two figures on your pay stub, the amount you actually earned and then the one you actually receive? In this country we pay a horrid thing called income tax and for the most part that’s the difference. Even after allowed standard tax exemptions it is still much less money which you’re taking home. This is what you have to live on.
When you work for ‘the man’ you go to work and put in x amount of hours to receive a paycheck that taxes are held from, then you buy things that you need with what is left after paying the tax. A proprietorship operates a little differently, they benefit from spending before tax is sent to Uncle Sam. Ultimately, paying a smaller tax.
When you have a business you go to work, earn your money, buy what you need and then pay taxes on what is left. Pretty neat idea, don’t you think? The business tax system does just that. It operates drastically different than what the average American tax payer knows about the ‘standard’ tax system.
There are simple tax deductions that you can get with your business that allows you to pay your kids and spouse to help you in your business as a paid employee! Yes, just like any other person out there that you could hire as an employee, but with much greater benefit & savings to you. Think of it instead as a tax allowance they could earn a pre-tax income from.
Now we are not talking about lying or creating fraud on a State or Federal tax return, as some would rather refer to it. Fraudulent tax activity can land you in a heap of misery, so avoid it. But, even if you have a young child, they can still help you with your next YouTube or Google video right? When they do, you may just be able to smile and hand them a big paycheck instead!
Won’t you be pleasantly surprised when little Timmy or Tara figure out there’s ‘money in those hills’. They will be eagerly helping you find more jobs to do in your company. This is all legitimate work you would hire others for that can be turned over to your kids and the income you paid them will qualify as a tax deduction for you.
One thing that makes this tax deduction so nice is you get to ‘purchase’ things with pre-tax money that you never thought you could, like your sons birthday gift for their friend. Now they pay for it from their paycheck and you do not have to. Or your kid could begin paying for their own $200 sneakers and karate fees.
And if all that were not great enough, you do not have to pay payroll taxes on your minor kids earnings or social security tax! The benefits just keep rolling in, no wonder there are so many businesses titled ‘…and son’, it is for the tax deduction as well as the family tradition of growing a successful company together.
Your employee children will also be benefited in most instances where you pay them less than $5,300 (amount changes annually). Because, under this amount of annual earnings your childs income is exempted and they owe no federal income tax either.
In short having a business is a great way to take advantage of everyday tax deductions and they’ve been around for years. Unbelievably a company is not that difficult to start, do you tutor, sell online or write from home for extra money? If so you have a company. Do you consult, market a product or service with a network marketing company? If so, you have a business.
As easy and lucrative as it is, I am amazed that more citizens have not started a businesses. Not only for the extra income it can create for your family, but the huge tax deductions you can get just by having one. Did you know you can in most cases use those deductions to lower the taxes you pay from your full-time job that you have right now? Even though that income is not part of your business revenue? However, you will want expert advice on how to take a business tax deduction. Sit down with or call a tax pro who is readily available can tell you all about it.
Filed under: Sales