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Business/Taxation problem

Discussion in 'Business & Tax Advice' started by tixpf, Dec 4, 2013.

  1. tixpf

    tixpf Regular Member

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    I had to rewrite my text about 15 times, don't know what the problem was, but it triggered 'anti spam' and wouldn't let me post it, so I made it very, very short. Sorry.


    My method is a changed up version of 7878's method. My income is going to come from local businesses/stores. How come nobody is speaking of taxation, when talking about Offline Marketing? You invoice stores and they keep that in their books, not to mention your income showing up on your bank account.
    It will only be a matter of time until the taxation office notices and busts your a**, right?. Am I missing something or would you actually have to setup a real business and run all of your income through taxation?
     
  2. benny>>

    benny>> Registered Member

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    The question is, how're you you contacting these businesses? Via phone? If so, incorporate offshore and run the call through an offshore SIP provider. Also, get an EU based VPN.
     
  3. Methuselah

    Methuselah Regular Member

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    It probably assumes that you are taking care of your own tax affairs and reporting them at the authorities in the usual way (or not as the case may be ;) ). None of the methods on here mention tax, but you are still liable to pay it on any earnings from them.
     
  4. stretch361

    stretch361 Junior Member

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    I'm not sure if you are in the US or not, but this is US related advice:

    If you are doing offline work for local businesses and you do not have a Tax ID number, you are doing business as a "sole proprietor". No matter what work you do, if it is over $600 in a year, you should be paying taxes on it. If you haven't gotten a Tax ID number, it should be listed as income on your standard tax return.

    Your best bet (for liability purposes, not necessarily for tax purposes) is to set up an LLC.
     
  5. burnett4congress

    burnett4congress Jr. VIP Jr. VIP Premium Member

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    The reason people aren't talking about taxes is because 1) they assume you are paying your taxes and 2) they don't know a lot about taxes.

    Fortunately, I do know a lot about taxes. I prepare taxes under a tax attorney and see over 2200 clients each year. For the rest of this, I'm going to assume you are making more than $30k a year.

    No matter what country you are in (possible exception of Greece), the tax men will eventually come after you if you don't report anything.

    For the US specifically (where I work), it will often take them about 3-5 years. But then they will bring down the hammer. Here's what happens:

    You get a letter from the IRS. It says that based on the information they have received from other sources they created a tax return for you. This is called a substitute for return (SFR). If you did file a tax return that year but didn't include this income, the letter will be slightly different. But the principle is the same.

    In this letter, it will state that based on these changes you owe taxes of <fill in big scary number here>. It'll be in big, bold letters on the left hand side of the paper. If you disagree with the amount shown, you can contact them and file forms and such. If you agree, you pay the money. If you ignore it, you will be charged additional interest at the rate of 5% per month. This is on top of the penalties and interest already included in the statement you received. And if you still don't pay, they will go after you bank accounts, paychecks from employers, cars, houses, etc.

    Side note: those commercials on TV for law firms that say "if you owe $10,000 or more to the IRS call and we can help" are a total scam. All they do is submit payment plans to get you back into the system. They don't actually fix the problem.

    OK, so that's the bad news. If you ignore this issue it will come back and hurt you in a big way.

    Now for the good news. If you plan ahead and set your self up correctly, you can have a very low tax liability or even not owe any taxes at all. Every situation is different, and that's why nobody makes broad recommendations. Good planning isn't free. Expect to be paying $1000 a year to have everything set up and managed properly. But that's better than paying several times that in taxes.

    If you live in the US and want to know a bit more, feel free to PM me.