Small Business Tax Tips – What Does it Take to Pay Zero Taxes?
December 20, 2011 | In: Internet Business
How numerous times have you heard somebody say, “I don’t spend any taxes. My accountant will take true great care of me…I haven’t paid a dime in taxes in years.” Does that outrageous statement sound familiar?
Perhaps it is your brother-in-law, or a fellow Soccer Mom, or a co-worker at the workplace. And so you feel to by yourself, “What am I undertaking wrong? How come I’m paying taxes and so-and-so says he/she pays nothing at all? How do they do it!”
Is it genuinely probable to spend “zero taxes”?
For purposes of this article, let’s give your “no-tax” pal or relative a name. Let’s call him “Charlie” (or if he is a she, just think “Charlene”).
OK, what is Charlie up to? What’s his secret?
Charlie has no secret. He’s not undertaking something that you ought to be undertaking. Do not be envious of Charlie, and here’s why…
I can consider of at least 5 causes you need to ignore what ever Charlie says about his “no-tax” scenario.
Purpose #1: Charlie is a liar. Every loved ones has one particular, so don’t feel bad. Let’s face it, some men and women just like to indulge in fabrications to make themselves really feel very good. Charlie is telling you a huge fat lie since Charlie has “issues.” ‘Nuff stated?
Reason #two: Charlie is pond scum. OK, hear me out on this one particular. I do not mean to offend you if Charlie is a close and dear relative, or your best pal, but I’m going to give it to you straight: Charlie cheats on his tax return, and he cheats big time. There are lots of folks out there like Charlie. He’s one of the good reasons that you and I pay so significantly in taxes — he does not report all his earnings, and he deducts bogus costs by the 1000′s.
He and his accountant may possibly even be in cahoots on this. Charlie brings in his records and his accountant crunches the numbers, then calls Charlie and says, “You owe $5,000.” So Charlie rummages around in his files and somehow managesto come up with one more batch of expenses that miraculously lessen his balance due to zero. It’s like magic!
End result: Charlie’s tax return is a large lie.
Charlie is a thief. Charlie should be put in jail for the tens of thousands in taxes he has illegally withheld from the government above the years.
Cause #three: Charlie is stupid. Again, I’m sorry if I’m becoming too difficult on Charlie. But some folks are so clueless about taxes that if they have no balance due on their return, or if they are acquiring a refund, they mistakenly believe they didn’t pay any tax that year.
And think it or not, this is really a quite frequent misconception that 1000′s of folks cling to. Ah, to be so blissfully ignorant!
I hope you are not so naive to feel that the “bottom line” on your tax return tells the entire story about your tax liability. It does not.
Cause #four: Charlie is broke. Charlie may truly spend zero taxes since –are you prepared for this 1? — Charlie doesn’t make any money!
Charlie owns a modest organization or works full-time at his self-employment activity, and Charlie might rake in hundreds of thousands in revenue from sales of his product or service — but Charlie’s company spends far more than it brings in, and Charlie’s business has a loss each and every year.
So Charlie doesn’t genuinely have a tax difficulty. As an alternative Charlie has any amount of other difficulties. He has a advertising dilemma, or a management problem, or a personnel difficulty. Charlie’s enterprise is failing, and paying zero taxes is just a symptom of a enterprise that will ultimately close.
Purpose #five: Charlie is just scraping by. Charlie’s enterprise might not be losing money every single year, but it is not genuinely creating a lot either. He has a small profit — sufficient to hold him busy. His organization could even “look” worthwhile, but it’s actually the classic shoestring operation.
So now, I ask you, do you truly want to spend zero taxes? Folks who don’t spend taxes are typically in one of these 5 categories: Chronic Liars, Pond Scum, Stupid, Broke, or Just Scraping By.
The purpose of company is to be profitable. The unavoidable outcome of a lucrative business is taxes. And yes, you should do almost everything legally feasible to lessen these taxes. But if you are going to be profitable, you are going to pay some taxes.
When it comes to taxes, stay away from Charlie.
(THPTAX-3085lv24)
