Are You Always Getting Screwed By Uncle Sam On Your Yearly Taxes?

 

I know I probably found a few people’s hot button right? You know you go to work for 40+ hours a week for approximately 50 weeks a year to only have the government take away their cut of your hard work! But, why are you giving away your hard-earned money when you could be working at saving it? Did you know the average American is paying approximately 21% in taxes per year? Wouldn’t you want to save part of that?

Let’s look at some numbers here before I tell you the real truth about either paying your taxes or making them work for you! If you live in New Jersey, Connecticut, DC, or California sorry you are living in some of the highest tax areas! But for those in Mississippi, Florida, and West Virginia you are in the lowest, so congrats there!

• In federal fiscal year 2014 (October 1, 2013 to September 30, 2014), the federal government collected $3.0 trillion in revenues, which were composed of 46% individual income taxes, 34% social insurance taxes, 11% corporate income taxes, 3% excise taxes, 1% custom duties, 0.6% estate and gift taxes, and 4% miscellaneous receipts.[1]

 

• In 2013, state and local governments collected $1.5 trillion in taxes, which were composed of 34% sales taxes, 30% property taxes, 23% individual income taxes, 4% corporate income taxes, 1% social insurance taxes, and 8% other taxes.[2]

 

As you can see those are some very large numbers that you are contributing too by working your J.O.B. for a given amount with not a lot of hope of moving up as quickly as you would like to better your current situation, correct? But, if you think in reality that when you get the better position what are you really getting? More than likely with your move higher up comes a better pay, which in turn means only more paid in taxes correct?

 

People are over paying on their taxes for 3 main reasons:

• Fear of the IRS and being Audited.
• Not keeping good tax records therefore missing out on deductions.
• NOT knowing the Rules!

 

So, how does one lower their taxes legally you are asking by now! Well, it is really simple. We all want more cash flow, more freedom, more family time, and to set our own hours right? There are basically two simply ways to cut your taxes:

 

• Make Less Money or
• Qualify for more TAX DEDUCTIONS

 

“The best way to qualify for more Tax Deductions and keep more of your hard earned money is to operate a “homebased Business”” Scott Estill – former senior trial attorney for the IRS

 

As a W-2 wage earner (employee) you are able to deduct approximately 10 items from your yearly taxes. As a Home Based Business Owner you get those 10 plus literally 1,000’s of others outlined in the IRS’s 70,000 plus tax codes and documents!

• A few of those deductions include: Office Space, Business Trips, Medical Expenses, Hiring your spouse or children, Meals, Entertainment, Auto Expenses, Cruises, Cell Phones, Utilities, Computers, Furniture, Internet, and many other business related items!

 

So, simply put the #1 tax strategy in America is to do something with the intent to make a profit from home! And to take advantage of what Congress has set in 3 simple requirements for you to meet:

• Have the intent to make a profit
• Work your business on a regular and consistent basis
• Treat it like a business – Keep good records!

 

So, these sounds all great and I am guessing you are thinking but, if you’re like me you want to see numbers!! Well, in 2014 the average American household income was $63,784 and average spending was approximately $41,000 based on a household of 2.5 people with 1.3 earning an income. This graph gives you the normal W-2 earner versus a homes based business owner and how simple taking a pre-tax deduction can literally save you thousands!!!

As you can see having the advantages of a home based business can gain you thousands more at the end of the year! And tell me what household isn’t already using most of the things daily that you could use as tax deductions if you had a home based business?

Do you have an extra five to ten hours per week to be a business owner and not only have a secondary income but also gain some very nice tax deductions legally? What if that five to ten hours turned into a primary income and it gave you the freedom you were looking for all because you wanted to save more money?

 

Let me ask you this, Why wouldn’t you want to save thousands a year??

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[1] Calculated with data from the report: “The Budget and Economic Outlook: Fiscal Years 2015 to 2025.” Congressional Budget Office, January 26, 2015. https://www.cbo.gov/publication/49892

Supplementary dataset: “Historical Budget Data—January 2015.” https://www.cbo.gov/…
“Table 2. Revenues, by Major Source, Since 1965 (In Billions of Dollars)”

[2] Calculated with data from:

3. a) Dataset: “Table 3.3. State and Local Government Current Receipts and Expenditures.” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised February 27, 2015.http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1
4. b) Dataset: “Table 5.11. Capital Transfers Paid and Received (Billions of dollars).” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised August 5, 2014.http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1