Help with Taxes from e-commerce site..

Hey Guys,

I'll keep it basic

I've made about $40,000 this year from "self-employment" of buying/selling goods on an e-commrce website

Currently with the regular + SE RIP OFF TAX I owe like $11,500, which I think is fucking redic

I don't have many write-offs, just the basic computer, internet, cell phone, eletric etc, its not very much, its all done via the computer

What do you guys do for the income you made online, there is no way the IRS can have any idea how much we made unless they dedice to audit randomly and check out bank statments

Anyone, report slightly less than they made? Anyone been auditted by this? Suggestions?

First off, if you have accrued tax liabilities then you must pay them. If you don't then its tax evasion which is a crime.

What you need to focus on is tax avoidance which is done by doing tax planning.

The way you avoid paying taxes is by incorporating offshore and opening an offshore bank account for the business. Then you are the owner/shareholder of this company. When you need money you simply declare a dividend to yourself. THIS AMOUNT IS FULLY TAXED TO YOUR COUNTRY OF CITIZENSHIP. However, any amount of profit that the company retains is not taxed.

Here is how it works
total profit: 40k
dividend/salary: 10k (--taxed at your citizenship
profit retained by company: 30k (---taxed by jurisdiction of business incorporation

This is what the rich as well as business savvy are doing. Just look at all those CEOs who take 1$ salary. Sounds novel but when you realize that their salary is taxed up to 35%+ and their business is taxed at below 10% then it comes pretty clear why the CEO takes that 1$. Tax avoidance at its finest!

http://en.wikipedia.org/wiki/Tax_avoidance_and_tax_evasion#Tax_avoidance

Legal entities
Without changing country of residence (or, if a U.S. citizen, giving up one's citizenship), personal taxation may be legally avoided by creation of a separate legal entity to which one's property is donated. The separate legal entity is often a company, trust, or foundation. Assets are transferred to the new company or trust so that gains may be realized, or income earned, within this legal entity rather than earned by the original owner. If assets are later transferred back to an individual, then capital gains taxes would apply on all profits.
The company/trust/foundation may also be able to avoid corporate taxation if incorporated in an offshore jurisdiction (see offshore company, offshore trust or private foundation). Although income tax would still be due on any salary or dividend drawn from the legal entity. For a settlor (creator of a trust) to avoid tax there may be restrictions on the type, purpose and beneficiaries of the trust. For example, the settlor of the trust may not be allowed to be a trustee or even a beneficiary and may thus lose control of the assets transferred and/or may be unable to benefit from them.

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