The U. S. Treasury Internal Revenue Code (IRC) is a carefully crafted official document completely understood by virtually no one. Thousands of pages of patches, fixes and amendments have rendered the income tax, originally a temporary measure to pay for a war, a bureaucratic monster that practically requires everyone to pay a professional just to assure a reasonable amount of compliance. We've all heard the stories of taxpayers acting in good faith upon advice from one IRS employee who are persecuted by another who disagrees. It is frankly time for the whole thing to be thrown out for something simple. However - all that being said, let's see how we can benefit with what we have.
Every individual employed by someone else earns their salary, pays their taxes first (after all they take it our before you're paid) and then gets to spend the rest. Every business entity earns its profit, and first pays its bills, and then pays taxes last. I think I'd rather do that. What about expenses you can deduct? If you and the family drive across the state to visit Aunt Sarah, that's a peronal trip - no tax breaks there. But if you and the kids are business distributors and go take some needed supplies to Aunt Sarah while you visit - that's a business trip and the entire cost could be deductible. If the management of your business decides it is necessary to have an annual retreat for strategic planning in the Bahamas - guess what? Yep - justifiable business expense. It is now, in fact, once again acceptable to the IRS that you deduct the use of part of your home for business purposes. All sorts of business expenses, things you cannot deduct personally as an employee could reduce your taxable income.
CAVEAT - although I, John Rorer, have a lot of tax and financial experience I am not, within the scope of this business plan, offering you any tax or accounting advice. You should consult a qualified tax advisor and/or attorney for such matters. That's just to keep us both out of trouble.
