Comments on: How Much The Average American Can Save On Taxes By Having A Business http://mywifequitherjob.com/how-much-the-average-american-can-save-on-taxes-by-having-a-business/?utm_source=rss&utm_medium=rss&utm_campaign=how-much-the-average-american-can-save-on-taxes-by-having-a-business Starting An Online Business When Your Wife Wants to Stay at Home With the Kids Tue, 22 May 2012 08:31:20 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Steve http://mywifequitherjob.com/how-much-the-average-american-can-save-on-taxes-by-having-a-business/comment-page-1/#comment-7441 Steve Thu, 08 Mar 2012 16:57:11 +0000 http://mywifequitherjob.com/?p=7787#comment-7441 Unfortunately, you can't write off your time:) Unfortunately, you can’t write off your time:)

]]> By: Salt Lamps Now http://mywifequitherjob.com/how-much-the-average-american-can-save-on-taxes-by-having-a-business/comment-page-1/#comment-7419 Salt Lamps Now Mon, 05 Mar 2012 16:13:34 +0000 http://mywifequitherjob.com/?p=7787#comment-7419 I have a question?? Whats my time worth?? I built my own website which took several hours, I read how to books, I attended webinars, I do regular maintenance on my sites and blogs. I am sure I can write these off but at what rate? I have a question?? Whats my time worth?? I built my own website which took several hours, I read how to books, I attended webinars, I do regular maintenance on my sites and blogs. I am sure I can write these off but at what rate?

]]> By: Steve http://mywifequitherjob.com/how-much-the-average-american-can-save-on-taxes-by-having-a-business/comment-page-1/#comment-3174 Steve Sat, 23 Jan 2010 15:25:49 +0000 http://mywifequitherjob.com/?p=7787#comment-3174 Hi Kevin, Thanks for catching that. I have made the changes to the article accordingly. That being said, the overall tax savings is not affected by this number. The tax bracket range in question is 33950 - 82250 so any deduction will save you the full percentage of all deductions at the top of your tax bracket as long as it doesn't take your income below 33950. The one major mistake which I just caught is that the tax bracket is actually 25% which I wrote down as 28% from memory. I'm updating the calculations now. Still significant savings regardless. Hi Kevin,

Thanks for catching that. I have made the changes to the article accordingly. That being said, the overall tax savings is not affected by this number.

The tax bracket range in question is 33950 – 82250 so any deduction will save you the full percentage of all deductions at the top of your tax bracket as long as it doesn’t take your income below 33950.

The one major mistake which I just caught is that the tax bracket is actually 25% which I wrote down as 28% from memory. I’m updating the calculations now. Still significant savings regardless.

]]> By: Kevin http://mywifequitherjob.com/how-much-the-average-american-can-save-on-taxes-by-having-a-business/comment-page-1/#comment-3171 Kevin Sat, 23 Jan 2010 07:18:14 +0000 http://mywifequitherjob.com/?p=7787#comment-3171 Your personal income tax information is incorrect and misleading. With progressive tax brackets you don't pay 28% on all your income. Only the income within the bracket. A single filer making 63k a year owes about 12k in federal income tax for an effective tax rate of around 19%. Great blog though. Your personal income tax information is incorrect and misleading. With progressive tax brackets you don’t pay 28% on all your income. Only the income within the bracket. A single filer making 63k a year owes about 12k in federal income tax for an effective tax rate of around 19%.

Great blog though.

]]> By: Steve http://mywifequitherjob.com/how-much-the-average-american-can-save-on-taxes-by-having-a-business/comment-page-1/#comment-3168 Steve Fri, 22 Jan 2010 16:37:08 +0000 http://mywifequitherjob.com/?p=7787#comment-3168 Hi George, I pulled the statistics from this website http://www.visualeconomics.com/how-the-average-us-consumer-spends-their-paycheck/ Hi George,
I pulled the statistics from this website
http://www.visualeconomics.com/how-the-average-us-consumer-spends-their-paycheck/

]]> By: Steve http://mywifequitherjob.com/how-much-the-average-american-can-save-on-taxes-by-having-a-business/comment-page-1/#comment-3167 Steve Fri, 22 Jan 2010 16:19:22 +0000 http://mywifequitherjob.com/?p=7787#comment-3167 Hi Michelle, It doesn't matter whether you have a FEIN or are using your own social, you can still take tax deductions as long as it is a part of your business. The best way to do it is to establish completely different bank accounts and keep separate books for your personal and professional expenses. Of course, if you are going to do that, you may as well get yourself an EIN. It literally takes a few minutes to do it online. Hi Michelle,

It doesn’t matter whether you have a FEIN or are using your own social, you can still take tax deductions as long as it is a part of your business. The best way to do it is to establish completely different bank accounts and keep separate books for your personal and professional expenses. Of course, if you are going to do that, you may as well get yourself an EIN. It literally takes a few minutes to do it online.

]]> By: George http://mywifequitherjob.com/how-much-the-average-american-can-save-on-taxes-by-having-a-business/comment-page-1/#comment-3166 George Fri, 22 Jan 2010 15:08:15 +0000 http://mywifequitherjob.com/?p=7787#comment-3166 Hi Steve, That's true. Income taxes from a job are taxed at the highest rates. And, having a business is the best way to reduce taxes. It is pretty strange that there are people who don't have their own business, when it is the most powerful way to reduce taxes. Are you sure about your income statistics? I think the average American makes about $30,000. The best book I have found about taxes is Lower Your Taxes - Big Time! by Botkin. Definitely worth getting. In the book I found strategies that my tax guy didn't know about. Also, it is important to have a great tax preparer help us make the most of our situation. Hi Steve,

That’s true. Income taxes from a job are taxed at the highest rates. And, having a business is the best way to reduce taxes. It is pretty strange that there are people who don’t have their own business, when it is the most powerful way to reduce taxes.

Are you sure about your income statistics? I think the average American makes about $30,000.

The best book I have found about taxes is Lower Your Taxes – Big Time! by Botkin. Definitely worth getting. In the book I found strategies that my tax guy didn’t know about.

Also, it is important to have a great tax preparer help us make the most of our situation.

]]> By: Michelle http://mywifequitherjob.com/how-much-the-average-american-can-save-on-taxes-by-having-a-business/comment-page-1/#comment-3164 Michelle Fri, 22 Jan 2010 14:25:36 +0000 http://mywifequitherjob.com/?p=7787#comment-3164 I make my money as a freelance writer. I could write off many of the same things that you, it seems. What I am wondering is this--I am not registered as a business. I simply write under my own name and my social. I know that I don't get the tax-free benefits of having an EIN, but I'm not so worried about that. Do you think I'll be able to write things off in the same way, or should I license myself as a business? Thanks for an article that covered just what I was needing to know, as I have only been freelancing full-time for three months. I make my money as a freelance writer. I could write off many of the same things that you, it seems. What I am wondering is this–I am not registered as a business. I simply write under my own name and my social. I know that I don’t get the tax-free benefits of having an EIN, but I’m not so worried about that. Do you think I’ll be able to write things off in the same way, or should I license myself as a business?

Thanks for an article that covered just what I was needing to know, as I have only been freelancing full-time for three months.

]]> By: Steve http://mywifequitherjob.com/how-much-the-average-american-can-save-on-taxes-by-having-a-business/comment-page-1/#comment-3163 Steve Fri, 22 Jan 2010 03:21:28 +0000 http://mywifequitherjob.com/?p=7787#comment-3163 @Mike I agree with what you are saying for the most part. Business travel is one of those areas in which if you use your common sense you should be okay. Of course, in the scenario you presented, the vacation would obviously not be deductible in its entirety. That being said, the bulk cost of any trip or vacation lies with the airfare and the lodging and there are a few rules that I didn't cover in this article. 1. If you are traveling for a trade show, there's no problem in expensing everything as long as it's within the duration of the show. 2. The trip has to have a clear business purpose and trip's primary purpose must be business. 3. Weekend stay overs are deductible if you fly. That being said, the little nugget that I probably should have elaborated on was that my trip occurred during trade show time. My wife and I went for the trade show and decided to make a vacation out of it. In any case, details aside, taking tax deductions is one of those things that requires common sense. It all depends on your risk threshold. Your accountant should help you out in that respect. @Mike
I agree with what you are saying for the most part. Business travel is one of those areas in which if you use your common sense you should be okay. Of course, in the scenario you presented, the vacation would obviously not be deductible in its entirety. That being said, the bulk cost of any trip or vacation lies with the airfare and the lodging and there are a few rules that I didn’t cover in this article.

1. If you are traveling for a trade show, there’s no problem in expensing everything as long as it’s within the duration of the show.
2. The trip has to have a clear business purpose and trip’s primary purpose must be business.
3. Weekend stay overs are deductible if you fly.

That being said, the little nugget that I probably should have elaborated on was that my trip occurred during trade show time. My wife and I went for the trade show and decided to make a vacation out of it. In any case, details aside, taking tax deductions is one of those things that requires common sense. It all depends on your risk threshold. Your accountant should help you out in that respect.

]]> By: Tyler WebCPA http://mywifequitherjob.com/how-much-the-average-american-can-save-on-taxes-by-having-a-business/comment-page-1/#comment-3162 Tyler WebCPA Fri, 22 Jan 2010 03:13:51 +0000 http://mywifequitherjob.com/?p=7787#comment-3162 God I love that photo! I think it is a great summary of some of the tax benefits of owning a business. In fact, there are probably many more available depending on your circumstance and your business. Mike King, you are correct that there are many regulations to be wary of and many hurdles to clear but, in the case of the vacation, if the travel is for a business purpose and a few days of vacation are tacked on, you can definitely deduct the cost of the travel. It always pays to do your research and plan ahead; or pay someone else to do it for you! God I love that photo! I think it is a great summary of some of the tax benefits of owning a business. In fact, there are probably many more available depending on your circumstance and your business. Mike King, you are correct that there are many regulations to be wary of and many hurdles to clear but, in the case of the vacation, if the travel is for a business purpose and a few days of vacation are tacked on, you can definitely deduct the cost of the travel. It always pays to do your research and plan ahead; or pay someone else to do it for you!

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