The there are far more tax deductions available to entrepreneurs, allowing you to maximize your tax savings by owning your own small business. An entrepreneur is someone who organizes a set of business systems to create a product or service in order to gain profit. Thus usually involves the establishment of a new venture while adopting some of the risk and being ready for failure. While inherently more risky than getting a “safe” job working for someone else, the opportunities often far outweigh the risk if you are willing to put forth the effort required to start a business.
There are essentially two tax systems in America, one for those educated in tax saving strategies and one system for the uneducated. The educated system is for business owners, and the uneducated system is for W-2 wage earners. Those in the W-2 system often pay up to 50% in taxes, and are left to survive on only half of their “salary.” On the other hand, the rich often only pay single digit taxes, reportedly as low as 4% - 5%, and this is one way the rich get richer. Learning and applying the tax deduction strategies of the rich can help you put that money back in your pocket.
Those in the W-2 tax system are taxed on their entire income, while business owners are not taxed on any business related expenses. Business owners can deduct such items as their car, home office, travel, and certain meals and entertainment. By converting their largest expenses from personal expenses (paid with after tax dollars) into business expenses (paid with before tax dollars), an entrepreneur can reduce their tax bill by thousands of dollars each year! This money can be put to much better use building lasting wealth for you and your family and saving for retirement.
There are several advantages to owning your own business; including unlimited upside income potential, the ability to work as much or as little as you choose, and being able to do something you really enjoy. At Pathfinder Business Strategies, we feel that you absolutely must own your own business in order to get ahead. Many people feel that they need to get a nice safe job working for someone else 40-50 hours every week, get a nice benefits package and retirement plan, and save doing the things they really enjoy for the weekend. But what if you could spend your entire week doing what you enjoy, have the potential to make more money, and have an even better retirement plan? With a sound plan and the right coaching, the risks of entrepreneurship can be minimized while unlocking your true income earning potential.
One of the first concerns facing entrepreneurs is how to legally set up their new business. Entity structuring is an important consideration for liability and assset protection, tax savings, and financing. While it is possible to go into business simply by saying that you now work for yourself (often called a sole proprietorship), proper entity structuring can help lower your tax bill and protect your assets from lawsuits and liabilities.
When it comes to lawsuits, the question is often not “Will I be sued?” but rather “When will I be sued?” Your odds of being involved in a lawsuit are downright scary. Often small business owners get too busy making money to bother with the way their business is structured, and leave their personal assets together with their business assets. When this happens, anyone who sues your business can come after your personal assets as well! This should be avoided at all costs, and can be easily done by setting up a separate entity for all your business relationships. An even more in depth entity structuring strategy can practically assure that you avoid lawsuits all together. With benefits like these, you can see the importance of organizing a proper business structure.
Most people are only taking a fraction of the tax deductions available to them. Organizing your affairs in such a way as to minimize your tax burden is a constitutional right for every American, and can save you thousands of dollars. There are over 300 tax deductions available to business owners, such as the travel tax deduction, which offer the opportunity to keep more of what you make and convert your largest expenses into tax deductions.
Your largest business expense is often taxes, yet it is often overlooked by business looking to cut costs. Sign up today for a free strategy session with out experienced tax saving business coaches to start reducing your tax bill today. We will show you how to use legal, time tested strategies, tax deductions, and tax filing tips to keep more of the money you have earned.
Don’t forget, success isn’t always immediate, and comes to those who are persistent and willing to listen to those who have been there before. Learn everything you can from those who have already started a successful business and watch your business grow.
For more information on the tax deductions available to business owners, please see the Tax Deductions Home page.