Federal and State taxes are a dirty word to most US residents, but what if you were making the tax code a benefit you instead of a seeing it as a feared monster? Most people working for someone else don't know there are ethical ways using tax deductions to keep more of their hard earned money in their pocket instead of sending it up to Uncle Sam! This is all perfectly legitimate?
In the great USA, we pay a horrible thing called income tax. I know Sen. Joe Biden say's it patriotic and all, but I can think of many other patriotic things I'd rather be doing. Did you ever pay attention to why there are two figures on your check stub, the amount you earned then the amount you actually get? Even after allowed standard tax exemptions it is still much less money you're taking home.
When you work for someone else you go to work and put in x amount of hours to receive a paycheck that taxes are withheld out of, then you buy things with what is left after having the tax withheld. Here's the big difference in the USA's TWO distinct tax systems. A business operates a little differently, they benefit from spending before tax is paid. Ultimately, paying a smaller tax.
When you have a business you go to work, earn the money, buy what you need and then pay taxes on what is left-over. Pretty neat idea, don't you think? The business tax system does just that. It operates drastically different than what the average US resident knows about the 'standard' tax system.
There are also tax deductions that you can get with your company that even allows you to pay your spouse and children to work for you! Yes, just like any other person you could hire as an employee, but with much greater benefit to you.
Let me start off by saying that we are not talking about lying or fudging on a tax return! Fraudulent tax activity can land you in a heap of trouble, so avoid it at every turn. But, even if you have a young child or teenager, they can still research a project online right? When they do, you may just be able to issue them a paycheck instead!
You could be pleasantly surprised when little Timmy or Tara figure out there is money to be made. They will be eagerly helping you find them more jobs to do in your company. This is all legitimate work you could hire others for that can be turned over to your kids and the income you paid them will qualify as a tax deduction for you.
One thing that makes this tax deduction so nice is you get to 'purchase' things with pre-tax money that you never thought you could, like your childs birthday gift for their friend. Now they pay for it from their earnings and you do not have to. Or your kid could begin paying for their own movie tickets and basketball lessons.
And if all that were not terrific enough, you do not have to pay payroll taxes on your minor kids earnings or social security tax! The benefits just keep rolling in, no wonder there are so many businesses labeled '...and son', it is for the tax deduction as well as the family tradition of growing a successful business together.
Your new employee child will also be benefited in most taxable instances where you pay them less than $5,300 (this amount changes annually). Because, under this amount of annual earnings your childs income is exempted and they owe no federal income tax either.
Having a company is a fab way to take advantage of these terrific everyday tax deductions and they've been available for years, even though unknown to most W-2 workers. Unbelievably a company is not that hard to start, do you tutor, sell online or write from home for extra money? If so you have a business. Do you consult, market a product or service with a network marketing company? If so, you have a company and deserve every one of these deductions & thousands more.
As simple and lucrative as it is, I am amazed that more US residents have not started a businesses. Not only for the extra money it can generate for your family, but the huge tax deductions you can get just by having one. Did you know you can in most cases use those deductions to lower the taxes you pay from your full-time job that you have right now? Even though that income is not part of your business revenue? However, you will want expert advice on how to take a business tax deduction. Sit down with or call a tax pro who is readily available can tell you all about it. - 15224
In the great USA, we pay a horrible thing called income tax. I know Sen. Joe Biden say's it patriotic and all, but I can think of many other patriotic things I'd rather be doing. Did you ever pay attention to why there are two figures on your check stub, the amount you earned then the amount you actually get? Even after allowed standard tax exemptions it is still much less money you're taking home.
When you work for someone else you go to work and put in x amount of hours to receive a paycheck that taxes are withheld out of, then you buy things with what is left after having the tax withheld. Here's the big difference in the USA's TWO distinct tax systems. A business operates a little differently, they benefit from spending before tax is paid. Ultimately, paying a smaller tax.
When you have a business you go to work, earn the money, buy what you need and then pay taxes on what is left-over. Pretty neat idea, don't you think? The business tax system does just that. It operates drastically different than what the average US resident knows about the 'standard' tax system.
There are also tax deductions that you can get with your company that even allows you to pay your spouse and children to work for you! Yes, just like any other person you could hire as an employee, but with much greater benefit to you.
Let me start off by saying that we are not talking about lying or fudging on a tax return! Fraudulent tax activity can land you in a heap of trouble, so avoid it at every turn. But, even if you have a young child or teenager, they can still research a project online right? When they do, you may just be able to issue them a paycheck instead!
You could be pleasantly surprised when little Timmy or Tara figure out there is money to be made. They will be eagerly helping you find them more jobs to do in your company. This is all legitimate work you could hire others for that can be turned over to your kids and the income you paid them will qualify as a tax deduction for you.
One thing that makes this tax deduction so nice is you get to 'purchase' things with pre-tax money that you never thought you could, like your childs birthday gift for their friend. Now they pay for it from their earnings and you do not have to. Or your kid could begin paying for their own movie tickets and basketball lessons.
And if all that were not terrific enough, you do not have to pay payroll taxes on your minor kids earnings or social security tax! The benefits just keep rolling in, no wonder there are so many businesses labeled '...and son', it is for the tax deduction as well as the family tradition of growing a successful business together.
Your new employee child will also be benefited in most taxable instances where you pay them less than $5,300 (this amount changes annually). Because, under this amount of annual earnings your childs income is exempted and they owe no federal income tax either.
Having a company is a fab way to take advantage of these terrific everyday tax deductions and they've been available for years, even though unknown to most W-2 workers. Unbelievably a company is not that hard to start, do you tutor, sell online or write from home for extra money? If so you have a business. Do you consult, market a product or service with a network marketing company? If so, you have a company and deserve every one of these deductions & thousands more.
As simple and lucrative as it is, I am amazed that more US residents have not started a businesses. Not only for the extra money it can generate for your family, but the huge tax deductions you can get just by having one. Did you know you can in most cases use those deductions to lower the taxes you pay from your full-time job that you have right now? Even though that income is not part of your business revenue? However, you will want expert advice on how to take a business tax deduction. Sit down with or call a tax pro who is readily available can tell you all about it. - 15224
About the Author:
Terry A. Sacia has published Reduce Your Tax Burden by Employing Your Spouse and Children since 2000. Learn about how to ethically and legally start taking home thousands more in earned income if you're currently working for someone else. Read more about business tax deductions here at www.HireYourKidsTaxFree.com
