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re: Tax question as an independent contractor
Posted on 12/29/14 at 1:27 pm to Poodlebrain
Posted on 12/29/14 at 1:27 pm to Poodlebrain
quote:
quote:
No way you should be paying 35% of your income.
35% is not an unusually high amount of tax for a self-employed individual, especially one providing personal services. The 25% tax bracket starts at $73,800 for married filing joint. Combine that with approximately 15% self-employment taxes and state income taxes, and it is pretty easy to get to a 35% effective tax rate.
quote:
Learn to buy shite. Whether you want that to be toys or investments in something like real estate or other business, never just willingly give the government that much money.
How does this reduce taxes? Expenses are deductible if they are ordinary and necessary. How do you justify the purchase of toys as being ordinary and necessary for business purposes as opposed to personal use? Can you substantiate the business use of your toys? Are you familiar with passive activity rules that would prevent the OP from deducting losses from real estate or other businesses?
setting up a LLC and showing investment or loss, this could include a vehicle for company use, houses, land, tractors, etc.
2
Posted on 12/29/14 at 2:25 pm to Lsujacket66
quote:I don't think you know what you are talking about. None of your suggestions will result in significant reductions in the OP's income subject to tax without causing him actual economic losses.
setting up a LLC and showing investment or loss, this could include a vehicle for company use, houses, land, tractors, etc.
Posted on 12/29/14 at 11:38 pm to Lsujacket66
quote:
setting up a LLC and showing investment or loss, this could include a vehicle for company use, houses, land, tractors, etc.
This is completely and utterly incorrect. Not only are you opening yourself up to auditors asking why, in the normal course of business, you would need these things, what happens if the company goes bankrupt? Oh that's right, all those things that were expensed through your company wouldn't be protected.
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