Minimize Tax Ideas

[MoGreen]

I'm an accountant during the day and and a Blackhatter after 5pm, I wish I have a 10 gallon black hat and a fake mustache to wear when I'm on my computer at home. I'm currently making some money BlackHat Style and I need to plan my taxes for when I scale up so I don't get fucked.

These are some ideas and advice that I'm putting together for myself so I can plan as I go. Please see if any of these will help you.

1. If you're still a sole proprietor I suggest to switch over to S-Corp. To minimize liability from your blackhat activities.

Tax benefit: Sole proprietor have to pay a self-employment tax of 15.3% on your earnings. Incorporate your business and elect SubChapter S status. You can then pay yourself minimum wage (only this gets tax at 15.3%), the rest of your income can be "distribution" which is only subject to your personal income tax.

2. Write off everything, your phone bill, your internet bill, your CL posting fees, portion of your rent and utilities use toward your home office.

3. Move over seas to tax heaven countries: Move to Canada (I know it sux but they give you a 5 years immigrant trust that's tax free), and a lot CPA networks won't think that you're in some underdevelop country trying to scam people.

* Please share other ideas, I will try to post more ideas later.

 

[callmelucid]

1) give the finger to the irs
2) say hello to wesley snipes

 

[innocent]

Just a word of caution for those following the advice above regarding paying yourself minimum wage and taking the rest as a distribution.... If you take too small a salary and too big a distribution you are setting yourself up for an audit big time. This is a huge IRS red flag. Be sure to take at least 60% or so in salary and then the rest as a distribution. 70% is even safer.

Oh yeah, and one last piece of advice, don't base your tax decisions on posts you read on BHW. No offense....just saying.

 

[drkenneth]

Yeah, a wise and rich man once told me "Never cheat on your taxes--once they IRS is on you once they're on you for life." Not worth it. If you're making decent money then pay a tax attorney or accountant and get it done right. A good accountant will save you far more than you'll have to pay them.

 

[BrianO]

I am not from US but many CPA sites are asking for the Tax information...then how to bypasss it guys???I cant give my current info...so what to do guys??

 

[faster78]

taxes are unfair. but you need to pay them not to get troubles.

ty

 

[MoGreen]

I am not from US but many CPA sites are asking for the Tax information...then how to bypasss it guys???I cant give my current info...so what to do guys??

You can file for a tax id in the us but you'd need a US address. I've read somewhere about people offering this service. Hmmm.... maybe have to read this up.

 

[MoGreen]

Just a word of caution for those following the advice above regarding paying yourself minimum wage and taking the rest as a distribution.... If you take too small a salary and too big a distribution you are setting yourself up for an audit big time. This is a huge IRS red flag. Be sure to take at least 60% or so in salary and then the rest as a distribution. 70% is even safer.

Oh yeah, and one last piece of advice, don't base your tax decisions on posts you read on BHW. No offense....just saying.

Good advice... as much as I would like to skim on my taxes. It's best to stay within audit boundary.

As far as 60% or more in salary, I would disagree. If you're working only 20 hrs a week and have everything else automatic. You can pay yourself for that 20 hrs/week. Even if the IRS come down on you, you can prove that you only work that many hours. You should pay yourself a salary base on the amount of hours work/knowledge/skill/etc not on a percentage of revenue. If you can prove that you can pay a skilled worker the same salary as you would pay yourself for the same amount of work and effort. Going minimum wage is a little extreme, but it's ok at the beginning when you don't make that much money.

Consult with your tax professional, try the ones that are willing to work with you.

 

[plantacja]

You can file for a tax id in the us but you'd need a US address. I've read somewhere about people offering this service. Hmmm.... maybe have to read this up.

If you are from outside US you don't have to to write any info in that field.. or you can write whatever you like.. it simple doesn't matter..

 

[MoGreen]

I am not from US but many CPA sites are asking for the Tax information...then how to bypasss it guys???I cant give my current info...so what to do guys??

There are some crappy CPA networks that will accept anybody, they won't even call to verify if you're a real person.

These 3 comes to mind for crappy CPA networks:
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