If you want to pay less tax, start a business.
I’ve said that for years as we’ve seen the IRS continue to chisel away at deductions that employees can take. On 1/1/2018, the Trump Tax Plan (Tax Cuts and Jobs Act) took away any possible confusion. Unless you have a business, your tax return got very simple.
How much did you make? Send it in.
Well, maybe not quite that bad, but your options just became very limited.
Start a business to get the best deductions. But there was a slight little gotcha that you had to watch out for, starting 1/1/2018. If your business is considered a hobby, you can’t take ANY deductions.
So, let’s say you sold $5,000 worth of handcrafted items on Etsy. Your cost of goods was $4,000, so you had profit of $1,000. But if it’s not a business, you pay tax on the whole $5,000!
That was the first inclination we had to be prepared to prove your business is a real business.
If you plan on just working for someone else, you really are hoping for the best. You have little to do with the outcome of the company and your position. If someone else makes bad decisions, you pay the price. And if it all goes well, you work hard and build up the value of the company for someone else.
Wouldn’t you rather work for yourself? Seeing the fruits of your own labor? And being able to control your destiny? Forget the tax savings (which are considerable), just being able to be in control is a powerful advantage.
And starting now, as we’re coming through a pandemic that has completely changed how many businesses work, there is a huge opportunity.
The world needs online, virtual solutions to solve its needs. You can work from home with your very own business. In the past, it took tens of thousands of dollars, maybe even hundreds of thousands of dollars, to start a business.
An online business can start with just a few thousand, or maybe even less if you’re not afraid to learn some new skills.
It doesn’t take much to start an online business and once it’s started you can change it, grow it, modify it, stop it…you decide! And if the market changes on you, you can rapidly adapt.
As part of Sustainable Digital Empires, a bonus home study course that is part of my regular coaching program, we’re talking about what it takes for you to get a profitable online company up and running fast.
Online businesses make money selling services, products and/or authority. Which one will you choose? I’m starting a new online business different than anything I’ve ever done before. The profit model is different. The marketing model is different. I’m going to build a new opt-in list. If this works like it does for everybody else, I’ll be making about $2,000/month net after 4 months.
What could you do with an extra $2,000 per month? Or do you need more? Easy! Sell services. That’s the highest profit avenue, but it’s also the lowest leveraged income. If you have more time than money, that maybe the best answer for you.
And, of course, we’re also going to look at the tax traps that go along with online businesses. For example, Sales tax nexus is a new issue that you can bet the states will be exercising soon.
If this sounds interesting to you, make sure you get signed up before the end of June. We’ll be moving into the next module then and you will be playing catch up. You can also wait until the course is finished and buy it. It’s more expensive and you won’t get the personal training, but that is an option too.
Whatever you choose, one thing is certain. The times are changing. If you want a different result, you’ll have to do something different. And that means taking charge of your own life.
No one cares about your financial future as much as you do. No one cares as much about your family’s future as you do.
If we can help, Contact Us
Drop me a comment and tell me what you’re doing now, as we move out of the pandemic. A new business? A new job? A move? Or hoping for the best?