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Help with Taxes from e-commerce site..

Discussion in 'Business & Tax Advice' started by toon4u, Apr 3, 2011.

  1. toon4u

    toon4u Newbie

    Joined:
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    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?
     
  2. killer2021

    killer2021 Regular Member

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    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

     
    Last edited: Apr 4, 2011