Taxes are a dirty word to most American tax payers, but what if you were making the tax code a benefit you instead of a seeing it as a fright? Most people working for someone else don't know there are ethical ways using tax deductions to keep more of their hard earned money in their pocket instead of sending it up to Uncle Sam! This is all perfectly legitimate?
In the great USA, we pay a horrible thing called income tax. I know Sen. Joe Biden say's it patriotic and all, but I can think of many other patriotic things I'd rather be doing. Did you ever pay attention to why there are two figures on your pay stub, the amount you actually earned then the figure you actually receive? Even after allowed standard tax deductions it is still much less money you're taking home.
At tax time a proprietorship operates a little differently, they benefit from spending before tax is withheld. Ultimately, paying a smaller tax. When you work for someone else you go to work and put in x number of hours to receive a paycheck that taxes are held out of, then you buy things with the money which is left after having the tax withheld.
When you run a business you go to work, earn the money, buy the supplies and items which you need and then pay taxes on what is left-over. Makes perfect economic sense, 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 spouse and children 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 fudging on a State or Federal tax return, as some would rather call 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 carry in your office supplies right? When they do, you may just be able to issue them a paycheck with that 'thank you'!
Won't you be pleasantly surprised when little Billy or Brenda figure out there's 'money in those hills'. They will be eagerly helping you find more jobs to do in your business. This is all legitimate work you would hire workers for that can be turned over to your children and the income you paid them will qualify as a tax deduction for you.
A big 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 kids birthday gift for their friend. Now they pay for it from their earned income and you do not have to. Or your child could begin paying for their own $200 sneakers and baseball fees. That could just be music to your ears, dad!
And if all that were not great enough, you do not have to pay payroll taxes on your minor kids wages 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 business together.
Your employee son or daughter will also be benefited in most instances where you pay them less than $5,300 (amount changes annually). Because, under this amount of annual wages your kids income is exempted and they owe no federal income tax either.
Having a business is a fab way to take advantage of these terrific everyday tax deductions and they've been around for years, even though unknown to most W-2 workers. Unbelievably a business is not that hard 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 mlm company? If so, you have a business and deserve every one of these deductions & thousands more.
As simple and lucrative as it is, I am startled why more citizens have not started a companies. Not only for the extra money 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 these 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 income? However, you will want expert advice on how to take a business tax deduction. There are professionals readily available that can tell you all about it.
In the great USA, we pay a horrible thing called income tax. I know Sen. Joe Biden say's it patriotic and all, but I can think of many other patriotic things I'd rather be doing. Did you ever pay attention to why there are two figures on your pay stub, the amount you actually earned then the figure you actually receive? Even after allowed standard tax deductions it is still much less money you're taking home.
At tax time a proprietorship operates a little differently, they benefit from spending before tax is withheld. Ultimately, paying a smaller tax. When you work for someone else you go to work and put in x number of hours to receive a paycheck that taxes are held out of, then you buy things with the money which is left after having the tax withheld.
When you run a business you go to work, earn the money, buy the supplies and items which you need and then pay taxes on what is left-over. Makes perfect economic sense, 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 spouse and children 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 fudging on a State or Federal tax return, as some would rather call 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 carry in your office supplies right? When they do, you may just be able to issue them a paycheck with that 'thank you'!
Won't you be pleasantly surprised when little Billy or Brenda figure out there's 'money in those hills'. They will be eagerly helping you find more jobs to do in your business. This is all legitimate work you would hire workers for that can be turned over to your children and the income you paid them will qualify as a tax deduction for you.
A big 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 kids birthday gift for their friend. Now they pay for it from their earned income and you do not have to. Or your child could begin paying for their own $200 sneakers and baseball fees. That could just be music to your ears, dad!
And if all that were not great enough, you do not have to pay payroll taxes on your minor kids wages 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 business together.
Your employee son or daughter will also be benefited in most instances where you pay them less than $5,300 (amount changes annually). Because, under this amount of annual wages your kids income is exempted and they owe no federal income tax either.
Having a business is a fab way to take advantage of these terrific everyday tax deductions and they've been around for years, even though unknown to most W-2 workers. Unbelievably a business is not that hard 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 mlm company? If so, you have a business and deserve every one of these deductions & thousands more.
As simple and lucrative as it is, I am startled why more citizens have not started a companies. Not only for the extra money 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 these 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 income? However, you will want expert advice on how to take a business tax deduction. There are professionals readily available that can tell you all about it.
About the Author:
Author Terry A. Sacia has published Reduce Your Tax Burden by Employing Your Spouse and Children since 2000. Learn about how to ethically and legally begin taking home thousands more in earned income if you're currently working for someone else. Read more about company tax deductions here at www.HireYourKidsTaxFree.com
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