Pay no tax and get a refund?

[Roparadise]

Is there any blackhat methods to set up your personal income and a llc in a way to not only pay no taxes legally but to get money back? I've heard rumors about people not paying any taxes but getting a refund as well as businesses getting a refund without paying taxes.

 

[Nimala]

That's interesting, I would like to know more about this also.

 

[LBrown]

If you have a low enough income you don't pay taxes and get money back. That's the American way.

 

[bushbabie21]

wow...thats really interesting...technically isnt a refund refunding the taxes that were paid but that you were exempt from paying? Dont see how it could work but i would be interested. Also if you have a real job, many take it out of your paycheck automatically right?

 

[LBrown]

The Earned Income Tax Credit and Additional Child Tax Credit are basically tax entitlement programs. The Additional Child Tax Credit is only for families with children and the amount of children you can get "credit" for is capped. The Additional Child Tax Credit was increased with the Bush "tax cuts" and that is increase due to expire next year. (I'm a tax junkie.)

 

[Enigma32]

The Earned Income Tax Credit and Additional Child Tax Credit are basically tax entitlement programs. The Additional Child Tax Credit is only for families with children and the amount of children you can get "credit" for is capped. The Additional Child Tax Credit was increased with the Bush "tax cuts" and that is increase due to expire next year. (I'm a tax junkie.)

layman's terms: the credit is applied as if you earned and paid that amount to them, rather then just a deduction.

 

[mrsix]

The Earned Income Tax Credit and Additional Child Tax Credit are basically tax entitlement programs. The Additional Child Tax Credit is only for families with children and the amount of children you can get "credit" for is capped. The Additional Child Tax Credit was increased with the Bush "tax cuts" and that is increase due to expire next year. (I'm a tax junkie.)

it's complete crap too if you ask me. I hope it expires but I don't think it will go away anytime soon.

 

[LBrown]

In layman's terms: you could make 5 figures (unearned) if you have the right # of kids and hit the right income point.

http://www.hrblock.com/taxes/tax_calculators/rate_tables/earnedincome_childtax.html

 

[Roparadise]

But wouldn't deductions+EIC make you money if you have a llc and pay yourself a low amount?

 

[volund]

But wouldn't deductions+EIC make you money if you have a llc and pay yourself a low amount?

You can not really just "pay yourself a low amount" with an LLC. The IRS is fairly strict on how you you allot the profits from a LLC.

The best thing to do is to find yourself a good CPA before making a decision on creating a LLC or Corp. While you can find the main differences online everyone's situation is different and the wrong decision could cost you a lot of tax money.

 

[hawke]

Earned Income Credit is how most do it, as long as you have dependents. I have 7 Children, (max claimable is 3 though) and i you can make up to 56000 and still get it... plus theres Marriage credits and other credits you can get.... by the time I'm done with taxes, I clear anywhere from $8500 to $10000 in a refund, depending on the initial income...each tax year...

 

[Roparadise]

Its probably better to just focus on increasing my income instead of worrying about paying taxes and getting a refund.

 

[skipjack]

What about income earned from websites, ie via paypal or through adsense, etc. How is this tracked for tax reporting purposes? Curious to how others manage this. Thanks

 

[pokerjk]

And I thought the scroungers in the UK had it good...

 

[skipjack]

We all should pay our fair share, was just curious to how closely it needed to be tracked vs what tools were available to do this for you, etc. Thanks for the feedback.

 

[willywonka]

I posted some info a few says ago you guys might want to read:

http://www.blackhatworld.com/blackh...ffshore-company-tax-purposes.html#post4186760

 

[the_demon]

To address the PayPal question: According to PayPal's new rules you must submit a SS# or EIN after 200 transactions or $20,000 whichever comes first.

More info:

http://www.dirjournal.com/business-journal/paypal-to-report-user-earnings-to-the-irs-what-it-means-for-your-business/