Taxes are your biggest expense in life so strategic tax planning is a must, pay your legal share and not a dollar more.
Tax code is over 75,000 pages and the wealthy use every page to legally avoid taxes (and you should too)
Here are 7 tax tips that can save thousands on Business Income:
1. Business Expenses:
Business owners can claim many deductions that salaried employees cannot, such as: Travel, Supplies, Advertising, Vehicle expenses, Home office costs, Internet & phone bills, Health insurance premiums, Education & professional development
2. Agusta Rule (Section 280A):
Allows homeowners to rent out their homes for up to 14 days per year without having to pay tax on rental income. If you own a business, you can host a team retreat, party, event, or meeting at your home, and rent it out to your own business.
Agusta Rule Example: You can rent at $500 per night, and have your corporation pay $7,000 for the ‘use’. That’s a $7,000 deduction for your business & you pay no tax on the money personally. This reduces your taxable income and also offers tax-free income from the rent.
3. S Corps:
An S corporation can help you reduce self-employment taxes. S corps allow business owners to take a reasonable salary from the company’s profits, so the 15.3% self-employment tax is minimized.
S Corp Tax Strategy Example: Assume you are the sole shareholder of an S corp & you earn $100,000 in income. If you take a salary of $50,000 & distributions of $50,000, you’ll only pay payroll taxes on the $50,000 salary. This could save you thousands of dollars in taxes.
4. Hiring Your Children:
If you own a business and have kids under 18, you can pay them $13,850 tax-free, plus deduct it from your taxable income. When you hire your child, this is a business expense and you can deduct it from your taxable income, lowering your tax liability.
Children can perform tasks such as administrative work, social media management, or other age-appropriate responsibilities. Your child will owe $0 in taxes and you legally avoided tax on $13,850. They can invest $6,500 of that in a tax-free ROTH IRA
5. Section 179 Tax Deduction:
The IRS Section 179 Tax Deduction allows business owners to write off the entire cost of a vehicle used for work (cars, trucks, SUVs, vans, etc.) For tax years beginning in 2022, the maximum Section 179 expense deduction is $1,080,000.
6. Primary Residence Exclusion (Section 121):
Homeowners can exclude $250,000 of capital gains from the sale of their home ($500,000 if married). If you sell your primary residence for a profit, you don’t pay taxes on the gain, up to these amounts.
7. US States with no State Income Tax:
• New Hampshire
• South Dakota
• Washington
• Tennessee
• Wyoming
• Nevada
• Florida
• Alaska
• Texas
Would you live in any of these States?
Taxes add up. Here is a $100,000 salary adjusted for taxes and cost of living:
$35,800: NYC
$36,000: Honolulu, Hawaii
$36,400: San Francisco
$44,300: Washington, DC
$44,600: Los Angles
$46,600: Boston
$49,000: Seattle
Would you live in any of these cities?
The wealthy use tax code to their advantage and you should too!
Introducing :
Slash Your Taxes: The Ultimate Guide to Paying the LEAST Amount of Tax Legally Allowed for Your Business or Side Hustle
The Ultimate Guide to Paying Less Taxes on Your Business, Freelance Gig or Side Hustle
If you ask normal people on the street what the best ways to save taxes are, you’ll usually get one of two answers: Your home, or your 401k.
BUT, if you ask any TRUE tax professional that same question, you’ll get the same answer every single time: Owning a business, no matter how big or small.
Why? Because almost all of the tax laws were written for the self-employed individual. Every big business (like Apple, Facebook, or Google) was once a small business that got started in somebody’s dorm, garage or at their kitchen table.
However, most business owners leave THOUSANDS of dollars of savings on the table each years because they do NOT take the time to understand what the rules are….and their accountant is too busy to explain all of the available deductions to them.
Or even a few of them, for that matter……
The tax code is over 77,000 pages long (!!!), but only about 30 of them explain the taxes that you need to pay.
The rest of the 76,970 pages show you all the exceptions to the rules, and how to lower your taxes,
….but most CPA’s focus their time on the 30 pages that say what you have to pay, and NOT on how to save money.
If you have your own business, you need my new course.
This course will show you EXACTLY how to legally maximize every single deduction you are entitled to, so that YOU get to keep more of YOUR money.
WARNING: This course isn’t for everyone. It is specifically designed for people that live in the US and are self-employed, have a side hustle, or are about to start a business.
If that does NOT apply to you, don’t worry: I will have several more general business and financial courses coming in the next few months that WILL be useful for you.
