"Thank you for the great tax-saving strategies you’ve helped me to use in my business. Just one simple suggestion saved me $2,295 in taxes my first year. I never would have thought of this strategy on my own. I’ve been able to utilize this same technique year after year — and this year I’ll save over $6,000 from this one loophole."
According to conservative estimates, small business owners and the self-employed are overpaying their taxes by $160 billion every year.
My name is Wayne M. Davies, author of The Tax Reduction Toolkit. I’ve been helping small business owners and self-employed people pay less tax for the past 15 years, and I’m here to tell you that you are entitled to your share of that $160 billion pot of taxpayer gold.
Everybody knows that the wealthy have been using fancy tax-reduction schemes for decades. With enough high-paid tax attorneys, any "fat cat" can get away with paying no tax at all.
But what about the average, middle-class small business owner? What about the self-employed person who is just starting out and who doesn’t have an extra 5 or 10 grand to spend on complicated tax-avoidance strategies and exorbitant tax consulting fees?
And what can you do to protect yourself from the onslaught of frivolous, time-consuming and potentially business-ending lawsuits that clutter our court systems today?
Perhaps you’ve heard that advice before. And perhaps you’ve thought, "Yeah, I should look into that." But you’ve stopped short. You’ve hesitated. You didn’t follow through, for any number of reasons.
Maybe you thought it would cost too much to incorporate: lawyer fees, filing fees, and the like.
Maybe you thought it would be too time-consuming, too much hassle, too much paperwork: forms, forms and more forms!
And now you’re back where you started, wondering (again), "Is it worth it? Are the advantages of incorporating really worth it?"
Or maybe you have incorporated your small business but are wondering, "Did I make the right choice of entity?" (In case you didn’t know, there are 3 (yup, three) different types of corporations, and each one is taxed very differently!)
So even if you already formed a corporation, how do you know you picked the one that enables you to pay the least amount of tax?
A Tale of Two Small Business Owners: Why Some Self-Employed People Pay Thousands Less In Taxes Than Others
Yet, he seemed compelled to do it anyway. It’s just that if anyone knew what he was doing, he would really be embarrassed. After all, who looks at his neighbor’s garbage all the time?
Tom reached up to his visor, and pushed the square button on the garage door opener. He was lost in thought as the garage door slowly moved up. He pulled the car in and had to navigate to get the car in without hitting his wife’s car or the bikes that were sloppily thrown in.
He pushed the door opener again as he climbed out of the car, and couldn’t help but glance out toward the neighbor’s house. The last thing he saw as the door moved toward the concrete floor, was the pile of trash.
He opened the door to the house, and was greeted by Becky. She was just getting home herself. She still had her raincoat on, as she was leafing through the mail.
"Hi, Babe," said Tom as he kissed her on the cheek. He took his coat off and as he was throwing it on the back of the barstool he asked, "You know, I’m embarrassed to ask this, but have you ever noticed the Jacobson’s garbage?"
Becky had a silly look on her face. She replied, "Well, actually, uh, now that you mention it, yeah, I have. Are you talking about all the boxes from all the new stuff they buy?"
"Yes. I hate to even admit this, but I can’t help noticing they seem to always have new appliances, or furniture, or whatever, for themselves and the kids. I don’t want to sound nosy or anything, but I know Richard’s business makes about the same as mine. You notice they also go on vacations a lot, and they sent Conner to Northwestern University? How do they do it?", Tom mused.
Becky was wondering the same thing. Actually, she was curious why so many of their Business Owner friends lived so differently. Some better, some worse. And even though she knows there are some unusual circumstances, it just doesn’t add up. How do Business Owners like the Jacobson’s do so much better?
"He must make a lot more than we think," Tom rationalized, as he headed for the refrigerator.
No, Tom. It turns out that Richard Jacobson doesn’t make more money than you do. In fact, Richard and Tom, these two typical Small Business Owners, own very similar businesses that bring in about the same amount of money every year.
And when you compare the overhead expenses of these two businesses, again, things are pretty much the same.
There is really only one major difference between Richard’s business and Tom’s business. Only one item that accounts for Richard having so much more profit than Tom does every year — and that one area is TAXES!
I’ve seen it time and time again in my 15 year career. I call it "The Tale of Two Small Business Owners." They have the same amount of money coming in and about the same amount of money going out — except for taxes.
Tom is The Typical Business Owner. He pays his taxes with anger and resentment, not realizing that there is a better way.
Then there’s Richard, who is hardly The Typical Business Owner. He is The Rare Exception. He has learned how to squeeze more juice out… Read more…
Leave a Reply
You must be logged in to post a comment.