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F U, Pay Me [Tax]

Discussion in 'Business & Tax Advice' started by sn0rt, Apr 12, 2013.

  1. sn0rt

    sn0rt Elite Member

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    For those of who are making money online, I'm kind of looking into ways to make next year's tax season a little less painful.

    Basically, I know that you can write off your expenses, but that only adds up to so much. Simply because I like to keep overhead costs low in order to maximize profits (unless of course there comes time to reinvesting, but that's another topic).

    As I'm working on a spreadsheet, a bell rings in my head. "What if I were to pay myself?"

    What I'm thinking here is, whatever it is I can't write off, I should be able to write it off as payroll or something of that sort.

    I'm not exactly sure how this works, hence why I'm asking you guys.

    So my questions are:

    • Is this something that can be worked out?
    • If so, how so?
    • What other measures of lubing up during the tax season can I take?
     
  2. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

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    Speak to an accountant, not a forum of strangers the vast majority of whom do not make any money online or pay taxes in the US (which I am assuming you are from).
     
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  3. sn0rt

    sn0rt Elite Member

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    Thanks for your input meathead. I plan on going to an accountant, I just didn't want to go in without any information. Yeah, I'm in the U.S. I just figured since we have a dedicated tax section that we'd have people in the know how on this side of the world.
     
  4. SkyrocketSEO

    SkyrocketSEO Jr. VIP Jr. VIP Premium Member

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    In Soviet Russia we don't pay Tax for what we earn online:)
     
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  5. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

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    I am sure you will get some advice from people here - but accounting advice really needs to be specific to your needs. Most accountants will do their first session with you for free, so it won't cost you anything to get some initial advice. Mine is always sending me articles to read to stop me pestering him with dumb questions ;)
     
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  6. walker

    walker Junior Member

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    your status is self-employ. if you pay salary to yourself, you will need to have a 1099, which means you still need to pay tax.

    claim self employ is actually simpler for you. You can claim many deductibles, including home office, vehicle, some meal, house keeping, childcare, ....


    good luck
     
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  7. ownal

    ownal Newbie

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    I would start an LLC and funnel your earnings through it. Pay yourself as little as possible, and you will only pay tax on that amount.
     
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  8. phracktl

    phracktl Regular Member

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    LLC's are pass through entities as far as tax goes so that won't help much.
    As others said - a good accountant is worth their weight in taxes.
    Im not US, but generally write of all allowable expenses, and look into the possibility of tax deferments through pensions (401), investments, insurances, loans, gifts, endowments...for which you need advice of a bean counter and maybe a PFA (but do your research too)
     
  9. sn0rt

    sn0rt Elite Member

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    Thanks guys. I appreciate all your inputs. It allows me to look at the situation from a few different angles. I plan on speaking to an accountant, I just don't want get duped around because of what may make him the most money.
     
  10. burnett4congress

    burnett4congress Jr. VIP Jr. VIP Premium Member

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    This is terrible advice.

    You absolutely do not want to be "self-employed." That would mean you are liable for self-employment (SS and Medicare) tax as well as income tax.
     
  11. mazgalici

    mazgalici Supreme Member

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    burnett4congress is right, is a bad idea
     
  12. sn0rt

    sn0rt Elite Member

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    My accountant has me putting away 30% for income tax, social, and medicare..

    Seems a little steep.
     
  13. burnett4congress

    burnett4congress Jr. VIP Jr. VIP Premium Member

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    Every tax situation is different, but chances are you are spending way too much.
     
  14. sn0rt

    sn0rt Elite Member

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    Occupation:
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    Well he files me as self-employed. Sched C. So he said a good way for me to be able to pay for the taxes at the end is to put away 30%, which should cover, income, ss, and medic.
     
  15. burnett4congress

    burnett4congress Jr. VIP Jr. VIP Premium Member

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    It's too much to go into right now, but your accountant is most likely an idiot.
     
  16. sn0rt

    sn0rt Elite Member

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    Occupation:
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    Heh, not the best thing to hear when it's about your accountant..lol