Just did my business taxes and personal

So I made $172,000 last year with my business.

Paid myself 75k in payroll (paid payroll taxes on that)

+

25k in SEP IRA

So that’s 100k of the 172k in direct compensation

I was able to come up with an additional 60k in write offs… this includes taking a 8k loss selling my Audi when I traded it in.. and the scheduled depreciation on the BMW I purchased. Plus a portion of my rent.. 80% of my car insurance 100 percent of my phone bill and internet.. 80% of the gasoline I bought for the year and some basic business supplies.

Which meant I had to carry over approximately 12k in revenue to my personal taxes.

I had to pay approximately 2k on my personal taxes for the additional 12k in revenue.



So in total I paid approximately 12k total in taxes all in (payroll and end of the year) on 172k in revenue.

Meaning I netted 160,000

Now let’s say you made the same 172k in payroll. I’m gonna take out the 2,000 I paid in supplies for my business

So you made 170k in payroll.

You have been taxed $50,332

To net the same amount I did in my state I would have needed to make 230k in payroll

And this is why you should open some sort of business

You take on significantly more risk being a business than a workcel.

I guess

I forgot to include state taxes in this.. I paid roughly 3,200 in state taxes from what I recall. Adjust the calculations accordingly.

well done, how much did you exaggerate on the expenses and why weren't business meals included?

I didn’t exaggerate on anything a large part of the deduction came from buying the BMW.. that’s why I did it.. it’s a tax loophole.

I saw an interesting take the other day of someone saying that "single filers" are essentially "second class citizens" since those who file married jointly get effectively double the tax relief.

That's kind of what I was expecting this thread to be about, but leaving enlightened. Didn't know the tax benefits were that major for business vs w2.

some types of business, sure.

but tradie work is ever green and pays more and more.

even just doing it on the side for writeoffs would be bigly beneficial

3rd class if you consider below business owners who can write off all kinds of ****.

single filers who are not poor but not rich get ****ed in this country. you're too rich to get handouts, too poor to get bailouts, and you don't own a business so you can't abuse the tax system.

They’re designed by greedy politicians so of course they are.

Most of that tax is spent towards the 850 billion dollar defense budget which is the greatest scam in the history of humanity

850 billion from a population of 350 million that's about $4000 per person after you subtract those who don't pay tax. And obviously its more for your income bracket. So I'd reckon about 50k of the 75k goes to the pentagon

small business is the backbone of the American economy, bud.

If the day comes a delusional collectivist dares tax us out of existence you'll remember this post.

Not the US tax code but, thinking of paying myself $0 this year and leaving the money in the co.

There’s only one way this is a good idea.

If you’re the owner of a publicly traded company.

There’s a reason CEOs of publicly traded company’s give themselves $1 salaries

They have a large amount of stock in the company.. the stock has an estimated value.. they’re now allowed to take a loan out against the stock tax free.

You’re likely not in that situation

didn't say anything against small business, chief. work on that reading comprehension, pal

Welcome to the life support system of America op.

Huh

Keep paying yo library taxes. As a matter of fact, I think we need to raise the budget. Thanks.

I’m surprised libraries still exist

Lol renting

I could care less.

What it would encourage is me buying an expensive car for the sole purpose of gaming the system.

i need to get on this train. gonna get a giant diesel and pollute the world on taxpayer dollar

If it’s over 6000 lbs you can use a special deduction. What you’re describing would qualify.

idk what OP is trying to say here.

buying a vehicle for tax deduction purposes doesn't save you money at all.

its just that instead of paying taxes you can spend that money on yourself for "business purposes"

he doesn't even pay that much taxes with a gross revenue of ~180k to really justify buying a car for "tax deductions" imo

Our company tax rate is 30%

My personal tax rate is 47% plus levies which is the top personal tax rate based on remuneration from my job

Consequently, every dollar I distribute from my co is subject to additional top-up tax up to a rate of 47% (unless I took a year or 2 of unpaid or part-paid leave eg when my son arrived)

So for me it’s the difference between 30% and 47%

The US has some of the best libraries. They could be even better though.

It does make a lot of sense if you would have bought a vehicle for personal use anyway

Even if you have to get a slightly different vehicle than you otherwise would have, being able to claim the depreciation on a vehicle, maintenance and insurance and registration, having other taxpayers subsidise your vehicle use is a massive advantage

Do you even tax

You’re really stupid. I’m able to use the full value of the loan depreciated on a schedule.. I didn’t buy the car outright. So for instance I got a 32k write off for the car this year (on an 63k total loan) and an additional 8k for trading a car in I was negative on. (I owed 42k on a car I got 34k for in trade for a gross profit of -8000)

This means in total I got 40k in write offs.. because I didn’t take the mileage deduction I took actual I was also able to deduct 80% of gas, car insurance and oil changes for an additional 8k in deductions. (My insurance is high af)

So 48k total in car based deductions.

I didn’t spend 48k out of pocket this year on the car loan. Not even close.


And guess what I still got to drive a cool car all year.

Please don’t comment on things you don’t understand.