5 Ultimate Tax Tips For Investors And Entrepreneurs
What They Are And How They Work!
These tax tips for investors and entrepreneurs are offered for general information only; and you are cautioned to seek competent tax help.
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What Are The 5 Ultimate Tax Tips For Investors And Entrepreneurs?
1. Set Up A Corporation
The first benefit of these tax tips for investors and entrepreneurs is to set up a corporation.
Then, you can set up a medical expense reimbursement plan for yourself without including any employees.
Your corporation can also own and claim depreciation deductions on your car.
Moreover, even if you are in business part-time, you can set up a tax sheltered retirement savings plan.
2. Work A Swap
How swap works? A swap is an agreement for a financial exchange in which one of the two parties promises to make, with an established frequency, a series of payments, in exchange for receiving another set of payments from the other party. These flows normally respond to interest payments based on the nominal amount of the swap.bbva.com
Work a swap of products or services at every opportunity.
Both you and the other guy will save a lot in taxes.
Neither of you will have as much recorded profit on a swap transaction.
Hence, less tax!
Also Read >>> The Secret To Lower Your Property Tax In Rural Areas
3. Avoid Employees
Have your work done by self-employed independent contractors and save on Social Security Taxes, Unemployment Taxes and Workman’s Compensation Insurance.
It’s what Uber, Lyft, etc. are doing basically.
4. If You Carry Inventory
Use the Last-In-First-Out (LIFO) method of valuing your inventory.
Your non-deductible inventory will consist of the oldest items bought before price increases, and you will be deducting the highest-priced materials or merchandise.
5. When In Doubt Deduct
The probability of an audit for small businesses with less than $50,000 income is very low.
Chances are your deduction will go through, and even if it doesn’t, it will only cost you the tax you would have paid plus a small interest charge.
Just be sure you have a valid reason for your deduction.
But, don’t get caught on a fraud charge.
It isn’t worth it.
Also Read >>> Independent Contractor vs Employee: IRS Does Not Care
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