Most Americans don't know there are legal ways using tax deductions to keep more of your hard earned money in your pocket and it is all perfectly legitimate? Federal and State taxes are a dirty word to most Americans, but what if you were making the tax code a benefit instead of a feared monster?
You know the reason there are two figures on your check stub, the amount you earned and then the amount you actually get? In this country we pay a frightful thing called income tax and for the most part that's the difference. Even after allowed standard tax deductions it is still much less money which you're taking home. This is what you have to live on.
When you have a job you go to work and put in x amount of hours to receive a paycheck that taxes are held from, then you buy things that you need 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 sent to Uncle Sam. Ultimately, paying a smaller tax.
When you have a business you go to work, earn your 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 in America does just that. It works on a much greater economic scale for families than the 'other tax code'. And, it operates drastically different than what the average American tax payer knows about the 'standard' tax system.
There are also tax deductions that you can receive with your company that even allows you to pay your minor children to work for you! Yes, just like any other person you could hire as an employee, but with much greater benefit to you. Think of it instead as a tax allowance they could earn a pre-tax income from.
Let me start off by saying that we are not talking about lying or creating fraud on a State or Federal 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!
I promise when little Billy or Brenda figure out there is money to be made they will help you find them more jobs to help in your company. Legitimate work you could hire workers for can be turned over to your kids and that will qualify their income for a tax deduction.
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 kids birthday gift for their friend. Now they pay for it from their earned income and you do not have to. Or your son could begin paying for their own $200 sneakers and baseball lessons.
And if all that were not splendid enough, you do not have to pay payroll taxes on your minor sons or daughters earnings or social security tax! The benefits just keep rolling in, no wonder there are so many companies labeled '...and son', it is for the tax deduction as well as the family tradition of growing a successful company together.
Your employee children will also be advantaged in most instances where you pay them less than $5,300 (amount changes annually). Because, under this amount of annual earnings your kids income is exempted and they owe no income tax either.
Having a company is a fab way to benefit from these terrific everyday tax deductions and they've been here for years, even though unknown to most W-2 workers. Unbelievably a business is not that difficult to start, do you tutor, sell online or write from home for extra money? If so you have a company. Do you consult, sell a product or service with a mlm company? If so, you have a business and deserve every one of these deductions & thousands more.
As easy and lucrative as it is, I am startled why more people do not start businesses. Not only for the extra money it can generate, but the huge tax deductions you can get. Did you know you can in most cases use those deductions to cut the taxes you pay from your full-time job even though they are not part of your business funds? However, you will want expert advice on how to legitimately take a business tax deduction. There are tax pros readily available that can tell you all about it.
You know the reason there are two figures on your check stub, the amount you earned and then the amount you actually get? In this country we pay a frightful thing called income tax and for the most part that's the difference. Even after allowed standard tax deductions it is still much less money which you're taking home. This is what you have to live on.
When you have a job you go to work and put in x amount of hours to receive a paycheck that taxes are held from, then you buy things that you need 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 sent to Uncle Sam. Ultimately, paying a smaller tax.
When you have a business you go to work, earn your 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 in America does just that. It works on a much greater economic scale for families than the 'other tax code'. And, it operates drastically different than what the average American tax payer knows about the 'standard' tax system.
There are also tax deductions that you can receive with your company that even allows you to pay your minor children to work for you! Yes, just like any other person you could hire as an employee, but with much greater benefit to you. Think of it instead as a tax allowance they could earn a pre-tax income from.
Let me start off by saying that we are not talking about lying or creating fraud on a State or Federal 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!
I promise when little Billy or Brenda figure out there is money to be made they will help you find them more jobs to help in your company. Legitimate work you could hire workers for can be turned over to your kids and that will qualify their income for a tax deduction.
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 kids birthday gift for their friend. Now they pay for it from their earned income and you do not have to. Or your son could begin paying for their own $200 sneakers and baseball lessons.
And if all that were not splendid enough, you do not have to pay payroll taxes on your minor sons or daughters earnings or social security tax! The benefits just keep rolling in, no wonder there are so many companies labeled '...and son', it is for the tax deduction as well as the family tradition of growing a successful company together.
Your employee children will also be advantaged in most instances where you pay them less than $5,300 (amount changes annually). Because, under this amount of annual earnings your kids income is exempted and they owe no income tax either.
Having a company is a fab way to benefit from these terrific everyday tax deductions and they've been here for years, even though unknown to most W-2 workers. Unbelievably a business is not that difficult to start, do you tutor, sell online or write from home for extra money? If so you have a company. Do you consult, sell a product or service with a mlm company? If so, you have a business and deserve every one of these deductions & thousands more.
As easy and lucrative as it is, I am startled why more people do not start businesses. Not only for the extra money it can generate, but the huge tax deductions you can get. Did you know you can in most cases use those deductions to cut the taxes you pay from your full-time job even though they are not part of your business funds? However, you will want expert advice on how to legitimately take a business tax deduction. There are tax pros readily available that can tell you all about it.
About the Author:
Terry A. Sacia has published Reduce Your Tax Burden by Hiring Your Spouse and Children since 2000. Learn about how to ethically and legally begin 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
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