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Your Smartest Move to Protect & Build Your Profits

Discussion in 'BlackHat Lounge' started by funkybunker, Nov 30, 2016.

  1. funkybunker

    funkybunker Supreme Member

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    The subject of what to do with your money, once you earn it, is hardly talked about here. I'll teach you a little trick that will pay enormous dividends over the life of your business. Hint: You won't reach CEO status with all of your money sitting in the bank.

    Everything You Buy with Your Own Money is a LOSS
    Incorporate your business. This is the single best decision you will ever make in finance. Imagine your corporation as a fortress for your money and other assets. It will shield you from lawsuits and even help you pay an incredibly low tax rate. The secret of the wealthy is... we don't actually own much. The more you can keep in your corporation's name; the better. Remember -- everything you buy with your own money is a LOSS. Things purchased by your corporation become an ASSET, saving or earning you money due to exclusive tax breaks. (real estate is a different game so do your research)

    Learn and Use Your Tax Deductions
    When done properly, deductions allow you to live a very comfortable lifestyle for nearly FREE. Essentially anything you do for business purposes is deductible. Traveling the globe, buying software and tools, office rent, hiring outsourcing, furniture, gas, phone bills, entertainment, insurance. The list goes on so speak with your attorney for more details.

    Earn a Low Salary, Live Like a King
    For example, your company earned $200,000 this year but you only paid yourself $40,000.. you will only be taxed for $40,000 while that $200k will be filed separately, allowing you to recoup most of what you spent as "company expenses." This is a vague analogy but my point is this:

    You become rich by investing into your business, not keeping money in the bank. Tie what you can into your business and watch your money grow year after year.

    -Funky
    I'm no tax expert. I'm lending my advice to those interested in maximizing their returns.
     
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  2. deal with it

    deal with it Jr. VIP Jr. VIP

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    Cool point of view, but seems so obvious from another point of view.
     
  3. spectrejoe

    spectrejoe Jr. VIP Jr. VIP

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    I wonder if the tax brokers wont come knocking on your door when you purchase cars and houses. They'll be like. "uh... so you make 20k a year and you purchased a house huh? Meanwhile you're also the owner of a business doing 60k a year."
    I don't know man. Wish I knew how taxes for company's worked in my country, as I'm reaching the monthly 2k I'm starting to get worried with the 24% Tax + the side fees
     
  4. funkybunker

    funkybunker Supreme Member

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    A great accountant is a worthwhile investment for this very reason. They will teach you where to put your money and keep a clean reputation with the IRS.
    A friend of mine built his business fast by paying himself minimum wage with revenue in the six-figure bracket, pumping money back into the business' growth.. eventually the IRS had some questions. I don't advocate fucking over Uncle Sam, only to keep and grow your income more effectively.
     
  5. Purush

    Purush Senior Member

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    If we spend in the name of company how money will grow. you are saying the reinvesting...if that means we are riskng earned money.

    Asking because need to know more. Good post anyway, would make people to think differntly
     
  6. funkybunker

    funkybunker Supreme Member

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    First, assets and expenses purchased within your company will save you money thanks to deductions and capitalized expenditures. This puts most of your money spent back in your pocket. Buying a car, boat, jet out of pocket is a liability > buying these as business assets create deductions. You recycle these savings back into your company through expansion, upgrades, aggressive advertising campaigns. This approach causes your money to not only re-appear but grow into more earnings over time. I realize it's common knowledge among some members but I want to save the up-comers from thinking every dollar their business earns should go in their pocket. It's expensive being a rich person but cheap being a rich company.
     
  7. Purush

    Purush Senior Member

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    thanks for explaining.
     
  8. thaqu

    thaqu Registered Member

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    Lol so you strategy to living like a king is having a business that makes 200k/year? Well no shit Sherlock...

    "Hey guys I have a really good strategy of how you can get full financial freedom and live your life however you want. All you need is a business making 10 million USD per day hurr durr"

    ...

    On a serious note, all this talk about tax deduction is all fine and dandy but at the end of the day lawyers are expensive and trust me, if you wat to get involved with tax evasion you really REALLY need some professional legal advise. For the vast majority of people earning normal incomes of under 100k/year this probably isn't worth it.
     
  9. Purush

    Purush Senior Member

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    Hi spending in the name of company is legal in every country. Its not tax evasion. It would be monitored under company law.
     
  10. thaqu

    thaqu Registered Member

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    You're missing the point. If you want to do what OP proposes (whether you want to call it tax evasion or something else idc) on any larger scale you really should seek advise from some legal proffessionals. Fun fact: Lawyers like money. A lot.
    Also your comment about spending in the company name being legal in every country is incorrect. If I have a car that I use for non-business related activities (ie. picking up the kids from school, doing groceries on my way home, etc.) I cannot keep all expenses related to the car inside my company.
     
  11. RankBoss

    RankBoss Jr. VIP Jr. VIP

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    hello bro

    i like it easily understandable
    i dont know that really work but
    keep post many more tips
     
  12. judaculla

    judaculla Jr. VIP Jr. VIP

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    OP is making a great point, dont be so quick to dismiss. For example, lets say you own a business that has a gross income of 500k per year. Your salary is 50k. If you bought a new car for 20k, your salary would leave you with 30k. If, however, your company bought the car, and you simply drove it, youd still get 50k in salary, and the car would be largely written off on taxes of the business. That doesnt mean the car is free, but it offsets the cost considerbly.

    Another great example of why you should incorporate can be illustrated by john kerry's law practice. This case is generally regarded by tax attorneys as the keystone case for reasonable income. In the us, an s-elective corporation is taxed at 15%. So, if your business nets 150k per year, you can take a salary of 50k, which gets taxed at roughly 34%, and the remaining 100k gets 'passed on' to your personal income as a capital gain, being taxed at only 15%. John kerry, took a salary of 150k at his firm that brough in 100+ million, and the irs deemed that to be reasonable. Its not tax evasion, its the goddamn legal way to do things. Youre still reporting all your income, youre just taking advantage of tax breaks.
     
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  13. dami3n

    dami3n Regular Member

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    I think you guys are missing the point. Of course the OP has posted something of interest but the key point to make is what type of "Company" are you running where the purchase of a jet as a "business purchase" is needed. to fly the board team around to appointment? good luck with that. Do you think the government is that stupid? Well yeah it kind of is, but still your skating on thin ice. A company car is only allowed if your a sales rep or its is imperative to have the car. Or else they will say it's personal and not allow you exemption. You can however deduct mileage costs and even claim your home as an office for more deductions.

    Of course claim no one is saying to not claim expenses even hire your partner he or she doesn't need to work just pay them the salary to avoid the tax. It's all about spending excess cash on assets and tax exempt goods in order to "balance" the books. The most important thing to take away from this is to always hire a good accountant.
     
  14. Capo Dei Capi

    Capo Dei Capi BANNED BANNED

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    If you have a corporation its better to reimburse yourself instead of taking the mileage deduction, since its tax free income. If you have something like the Toyota Prius, and you're company has a few different niches you can travel all over the US for legit business purposes racking up mileage for tax free income.m
     
  15. Sombrero

    Sombrero Senior Member

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    So we all own business??
     
  16. Capo Dei Capi

    Capo Dei Capi BANNED BANNED

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    Deductions are pretty much bullshit, its better to focus on type of company structure, location of company, and income source rather than trying to "gain" something by spending. $100,000 in tax write-offs at 30% tax is still a $70,000 hole.Unless you need something don't buy it just for a tax write off.
     
  17. thaqu

    thaqu Registered Member

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    This is dependent on the specific regulation in your country. I don't know how it works in the US but where I live (Scandinavia) you can't just let your company buy a car and then use that car for personal activities that are not related to the business. If you do you have to pay personal tax on some (if not all) of the expenses of the car.

    I guess my use of the word evasion triggered a bunch of you, holy moly. I didn't mean tax evasion in the criminal sense, so I guess I should have used the word "optimisation" instead but oh well... However, the point I made about tax evasion (optimisation) was not that OPs idea is illegal but rather that if you wanna get engaged with it you should seek legal advise. Tax regulation can be quite complex and if you don't have a legal background you almost certainly will make a costly mistake if you don't seek advise from professionals.
    Now considering the price of legal advisors and that most people don't have a business that earns 500k/year OPs "strategy" seems out of place.

    At the end of the day OP's post can be boiled down to "make sure you optimise you tax payments". Yeah no shit Sherlock no1 ever thought of that...
     
  18. Sherbert Hoover

    Sherbert Hoover Jr. Executive VIP Jr. VIP

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  19. spectrejoe

    spectrejoe Jr. VIP Jr. VIP

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    I mean if your company is based on websites like 90% of the people are in BHW how would buying god knows what be a business expense, we don't really have a way to lie about it to be honest
     
  20. dami3n

    dami3n Regular Member

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    That's why I said if it's for purely business you can claim on it... if it's more personal you cant hence the claim on the mileage.