![The reality of trying to escape the tax man. [843x811 - 120KB]](https://pic8.co/sh/cfAKoG.jpg){kind=link}
He's talking about tax games some self made wealthy people play. Like if you own a business with good cash flow you can start an LLC, use your main business to loan the new business money to buy a house for you to live in and or a vacation homes. Start a rental business for your toys, flip real estate, and quickly reinvest the profits into bigger more expensive real estate. Once you get to the point you can take a big pay day pay tax one time, and live off that money for years, while you reinvest your companies cash flow. Thats how Buffet can make the claim his secretary paid more taxes than him. He's probably been operating off the last paycheck he cut himself for 25 million dollars in 1985 because he doesnt need to take a check, he can increase his net worth through the value of his companies. I responded to him with an explanation of why it isnt practical for "most well" off business owners to do.
Nah - you don’t need to get that far to start winning the tax game. Start a business selling microwave food on Facebook, and you’ve got hundreds in write offs each month - computer, phone, internet, office, car, gas. You don’t need to make any money doing it either
You don't need to make Money? Wtf are you talking about.
If you have a business, it doesn’t need to show a profit - you just have to have a business and put money in it. From the IRS perspective, you write off those losses.
If you have a dog poop scooping business, and you “attempt” to make money, that’s all that matters. Tour phone you use to make calls, your internet where you attempt to schedule business, your office in your house - all can be written off. Say it costs you $10k in bills per year, those are all business losses, and offset the taxes you pay
It’s very rudimentary and oversimplified, and you should talk with an actual accountant before attempting it, but the long and short of it is business are taxed on profits. If you have more losses than profits, you’re not taxed.
$100k day job -$30k because of income tax -$10k in side business losses and expenses +$10k in tax refund.
If it isn’t making any money what are you writing off? W2 income?
You’re writing off losses incurred by your side business.
I’ve oversimplified everything, and to really use this, you should work with an accountant.
https://www.curleyrothman.com/blog/how-will-your-business-be-taxed-on-profits
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