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If you are making $30,000.00 per year and are paying an 18% federal income tax rate you could pay $5,400.00 in federal tax. If you were able to cut your tax liability in half it would be like getting a $50.00 per week raise! Operating your own business is not as difficult as you may think. Everyone has a hobby or skill that can be turned into a legitimate small business. What do you enjoy doing? What are you good at? Is it growing vegetables, fixing cars, baking, drawing? There are more reasons to "formalize" your skill or hobby into a small business than there are reasons not to. You do not need an office, education, money, experience, or even a profit in order to own a small business. Getting a raise is no secret!How to reduce your taxes, thus giving you more take home pay, is not a secret. Tax deductions, through your part time small business, are the answer. Even the President of the United States is a supporter of small business startups. There are volumes of free information on the internet or at the library on how to maximize your small business tax advantages. The IRS website offers great insight on how to take full advantage of business related tax deductions. If you are still unsure how to start ask an experienced person to walk you through the process at the start. Don't wait for your boss to give you a raise!Every time you have a business deduction you are giving yourself a pay increase. Let's use an example (that is very possible) and say you had enough business tax deductions to eliminate your federal tax requirement for the year. You paid 18% of your gross pay (after allowed personal deductions such as a flexible savings account) in federal tax. Suppose you typically get a 3% pay increase every year. However, this year you have eliminated your 18% federal tax liability and you are entitled to a refund of the money that was taken out of your paycheck throughout the year. That refund will be like getting 6 years worth of raises right now! The best way to maximize your efforts in creating tax deductions is to work with an experienced counselor and accountant. Here are a few websites that can get you started in the right direction. http://www.irs.gov/publications/p334/ch08.html For more information visit BowmansMoneyCollege. You are invited to join me at LinkedIn!
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