Discussion in 'Business & Tax Advice' started by FrozenSpade, Sep 21, 2009.
How can I pay less taxes?
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Claim all your business expenses as deductions. (Software, computers, web hosting, etc.)
If you're making decent money hire an accountant/tax attorney to go over your taxes. A good accountant will save you significantly more money than they cost. (In terms of helping you find deductions, helping your LEGALLY shelter money from taxes, etc.)
Also, another important way to pay less taxes is to PAY YOUR TAXES. (Oddly enough.) If you dodge the IRS, they WILL eventually catch you and you will continue to pay for it for the rest of your life. (Once you get the IRS on your tail, they'll never leave it. Even if you're legitimate for years. They'll keep auditing you and keep finding ways to screw you over. Don't let short term greed wreck your prospects in the long run.)
Incorporate as You, LLC (Limited Liability Corporation) and get a good accountant. Seriously. And if you have an accountant and you're paying more than 15% in taxes, fire them.
The importance of incorporation is that your personal assets are protected. A corporation is treated as a person with regard to all legal and tax matters. If you're really concerned, check into incorporating off-shore. I'm sure there are some members here that will be able to give you some advice.
The importance of having a paid preparer is that if you are audited, your accountant acts as your liaison between the IRS and you. You won't be answering any questions directly. Make sure you get an accountant that's in your corner and able to be a dick when necessary.
I end up paying quite a bit of taxes because I really have no business deductions to speak of . Most of my traffic is free, I do all my coding myself, and I rarely buy any kind of supplies or anything (and you can only claim things like computers, etc ONCE).
It's a bit dishearting to give away 35% of my income every quarter, but the way I see it, it's a good problem to have. I could be making NO money online.
although I never pay taxes... but I work for an accounting company
I prefer spending the money for my complete needs first.. later pay taxes for development of our government
taxes are used for development of our country
If you work for yourself why a LLC and not an S-corp?
More then 15% fire them? Hmmm
Corporations (both C and S) require significantly more paperwork than LLCs. Also, S-corps have several restrictions that do not apply to LLCs and C-corps. Last, but not least, S-corps are more likely to be audited by the IRS than LLCs.
May be.. But they're the reason for your secure sleep right ?
195471 Summed it up quite well:
As far as 15%, a good tax accountant should be able to find enough legal deductions, assuming a context of a small business, to reduce your tax liability to around 15%. A good tax accountant should also be able to give you advice on how to structure your business to facilitate that.
The fact is, a business owner has more deductions available than an employed individual. Warren Buffet stated in a 2007 interview that he paid 17.7% in taxes on the $46,000,000.00 he made the previous tax year. His secretary paid 30% on $60,000.00.
This is as much an illustration of why you should incorporate as much as it is a statement on just how jacked up the U.S. tax system has become.
LE: Damn typos!
Guys I'm not from the US so I don't know what an S-Corp is.
What do you guys deduct?
If you're a one man (or woman) show, an LLC is the way to go.
Sorry...missed your other question.
I deduct mileage on my car for my offline business activities, I depreciate my computer equipment (when I can), I deduct a portion of my phone line expenses, and whatever else my tax accountant tells me to.
I think I mentioned this earlier in the thread, but I would highly recommend hiring a tax accountant if you're going to pay U.S. taxes. They're not as expensive as you might think and they make an audit much less painful because they act as a liaison between you and the IRS.
sdtopensied your answers help me a lot thanks.
But I will give you an example:
Supposed somebody makes $5k/mo
$130 senuke or other tools
$200 Computer components when possible
= still $4400 (in best case)to pay for.
Become a tax nomad and don't live resident long enough in any country to have to pay tax.
183 days a year for U.S./Australia and 91 for UK I believe. I take a lot of holidays
Try writing off beer and restaurant expenses. Make up a reason for the "entertainment" and who you were with and write it on the back of the receipt after you pay the bill. The reason can be what you are currently working on, how to implement etc. As long as you have a log, you should be able to get away with it.
Claim you PS3 or Wii as "computer equipment", or home theatre.
PS3 Could be considered a form of advertising if your using the [email protected] application on it and use your company name / url as the team name... Hence as you rank you would get exposure aka. advertising.
Just a thought.
Exactly.. or use your wii remote as a prop and promote a clickbank product on video then youtube it.. now you have a tax-free wii.
What's the $100 expense for (mileage or maintenance)? If you don't have a big enough deduction for mileage on a vehicle, you can look into deducting operating (gas) and maintenance expenses as an alternative.
You can also deduct a portion of your rent/mortgage, utilities (electricity, gas, etc) for the operation of your home office.
A good way to get some ideas for deductions is to download a copy of Tax Cut, Turbo Tax, or your favorite tax program and go through the motions of doing your taxes. These packages usually have a deduction finder that will give you ideas on how to find additional deductions.
For example, in the United States, if you bought a new car in the 2009, you can deduct the sales tax from your tax liability.
At $60,000 per year ($5,000 per month), you're at a 25% marginal tax rate. To get down to the next tax bracket (15%) you'll need to get your taxable income after deductions down to around $33,000.00.
The programs I mentioned above are good, but if you can swing it, the best way to go is a tax accountant.
Something else just occurred to me. The Warrior Forum has a section called "Mastermind Groups" where people meet on a regular basis at a restaurant, etc. You can get on there and find a group or two to meet with on a regular basis. A portion of those meal expenses are deductible as is the mileage to and from the meeting.
When you eat out, make it a point to talk business as often as you can. I make a note of what was discussed on the back of the receipt. I've been audited before, and my accountant advised me that my notes are what got almost all of my meal expense deductions through the audit.
Very helpful post. Thank you sdtopensied. These answers really help me. If anybody has other ideas just post them here
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