About small business people...

[The Paperboy]

No one is going to give you that kind of information regardless of their bona fides. And rightfully so.

If we're wrong about him, we're wrong. If we're right, we're right. But he doesn't have to prove anything by violating his own privacy.

Jillian,

Even though I do not agree with you on much my gut tells me you are a person of honesty and integrity. And besides we're both New Yorkers (as far as I can tell from your postings).

I'll be glad to PM you my website if you respect my right to privacy. You can ask me any questions you'd like via PM and report back to the board.

I am only bothering with this as I think it is important that people on this board get the viewpoint of someone who is a success and did it on their own with no help from government.

If you're interested let me.

 

[bk1983]

No one is going to give you that kind of information regardless of their bona fides. And rightfully so.

If we're wrong about him, we're wrong. If we're right, we're right. But he doesn't have to prove anything by violating his own privacy.

I did not ask for personal information, everything I asked for can be verified legally through public records.

 

[Ravi]

I am only bothering with this as I think it is important that people on this board get the viewpoint of someone who is a success and did it on their own with no help from government.

Like me? Or Jillian? Or Care?

Oh, wait, I forgot we're all welfare queens.

 

[Skull Pilot]

If you own a business, you can easily get taxable money off of your 1040.

Max out all tax deferred retirement accounts

2009 max 401K 16,500 from your income and the business can match which does not count towards your max contribution. If you are 50 or over you are allowed an additional 5500 annual catch up contribution.

If you still can't get below the magic number, open another business with your primary business as its sole customer. For example,

You own a business, we'll use a veterinarian since you mentioned that earlier.

If you own the building where you do business, the business can pay rent to a management company, the second business you own, This management company can be paid, by your primary business to mow the lawn, plow the driveway, change light bulbs, paint a closet, clean the building etc etc.

Of course all the money your primary business pays to the management co is a write off so you lowered your profit in business #1

Now as owner of the management co, you can open another 401K max it out, and match your contributions. You can also have your manage co buy a new truck, a new snow blower a new lawn tractor etc as business expenses.

So don't fret, there are ways to play the tax game

 

[The Paperboy]

That small businesses pay tax.

I never said that but if I did it is only that as small business person I do not think of myself separate from my business. It's just an accounting matter.

That you will pay an additional 8,000 a year in tax.

That was a quick estimate off the top of my head. I simply multiplied $250,000 by 3% which is $7500.00. My apologies if I am in error.

That a 3% tax increase on personal income will hurt small business.

This is my opinion. Sorry if you disagree.

Really the whole point of thread is would you rather have government spend people's money or let the individual spend it.

I think we've beaten this point to death and gotten people's opinions about.

 

[bk1983]

Jillian,

Even though I do not agree with you on much my gut tells me you are a person of honesty and integrity. And besides we're both New Yorkers (as far as I can tell from your postings).

I'll be glad to PM you my website if you respect my right to privacy. You can ask me any questions you'd like via PM and report back to the board.

I am only bothering with this as I think it is important that people on this board get the viewpoint of someone who is a success and did it on their own with no help from government.

If you're interested let me.

The fact is the truth does not change, you have changed your story over and over again.

 

[bk1983]

To answer your question, I rather have individuals control their own money. But when in a hole, we have to stop digging. A tax hike to less then 2% of small business will not hurt the economy. I also find it ironic you make exactly 250k, the rate where Obama tax raise goes into effect.

 

[The Paperboy]

If you own a business, you can easily get taxable money off of your 1040.

I am not fretting about it. But you raise a very good point. And that is that people who make decent incomes can always find loopholes.

Another loophole is to make income as a Capital Gain so you only pay 15%.

So you look into the future and as Obama increases spending by a trillon the middle class will eventually get hosed.

Another way people will get screwed is by Obama's proposal to remove the cap on what income is taxed for social security. Right now it caps at $97,500.00. He wants to remove the cap. If he does that what employer will want to give a person a raise beyond the $97,5000.00 as the employer will also have to pay an additional 6.25% toward FICA.

 

[bk1983]

I am not fretting about it. But you raise a very good point. And that is that people who make decent incomes can always find loopholes.

Another loophole is to make income as a Capital Gain so you only pay 15%.

So you look into the future and as Obama increases spending by a trillon the middle class will eventually get hosed.

Another way people will get screwed is by Obama's proposal to remove the cap on what income is taxed for social security. Right now it caps at $97,500.00. He wants to remove the cap. If he does that what employer will want to give a person a raise beyond the $97,5000.00 as the employer will also have to pay an additional 6.25% toward FICA.

you cant make income into capital gain. capital gain is profit obtained from investment, the tax is applied to the return. you cant turn your income into capital gain. you will have to show for example how stock gained, the tax will apply to the difference in what you paid and actual earning.

 

[Skull Pilot]

That's an easy one to fix. If you are the biggest salary on the books, and as owner, you should be, you can keep your income below 97K and put your spouse on the payroll even if he or she doesn't work at the business.

If you're paying other employees above 97K there's not much you can do but not too many small businesses have employees on the payroll with that kind of salary.

 

[bk1983]

That's an easy one to fix. If you are the biggest salary on the books, and as owner, you should be, you can keep your income below 97K and put your spouse on the payroll even if he or she doesn't work at the business.

If you're paying other employees above 97K there's not much you can do but not too many small businesses have employees on the payroll with that kind of salary.

exactly, owners will often avoid the higher brackets by paying themself a modest salary, while gaining majority of income thru dividends etc. the dividends would be taxed at the lower rate, and their modest income fits into a bracket of lower income levels.

 

[The Paperboy]

To answer your question, I rather have individuals control their own money. But when in a hole, we have to stop digging. A tax hike to less then 2% of small business will not hurt the economy. I also find it ironic you make exactly 250k, the rate where Obama tax raise goes into effect.

Actually I made $298,109.00 last year but the taxable income was $193,924.00. So Obama's 250K tax will not effect me but:

a. He will allow the Bush tax cuts to expire which will effect me and a lot of people making a lot less than me.

b. He wants to nearly double the Capital Gains tax which will effect me and a lot of other people making a lot less than me.

c. He wants to remove the cap on what level of income you pay FICA on which will effect me and a lot of other people making a lot less than me.

d. It is my opinion that he will lower the income level he wants to tax.

That being said I could go along with paying more tax if he frooze or cut spending. But he wants to increase spending by a trillion.

The other thing that really bugs me about Obama is his statement in the Democratic Primary debate that he want to raise the Capital Gains tax for "fariness" NOT because it would generate more revenue since the moderator pointed out that lowering the Capital Gains tax increased revenue.

Video here:

[youtube]<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/WpSDBu35K-8&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/WpSDBu35K-8&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>[/youtube]

 

[Skull Pilot]

I'm not worried about BHO's tax increases. My wife and I aren't at 250K yet but even when we are, we'll never show that much income on a tax return.

 

[The Paperboy]

exactly, owners will often avoid the higher brackets by paying themself a modest salary, while gaining majority of income thru dividends etc. the dividends would be taxed at the lower rate, and their modest income fits into a bracket of lower income levels.

I play it very safe with the IRS. I don't like to do anything tricky and would rather pay more tax than raise red flags with the IRS. I went through a brutal IRS audit several years ago so if that ever happens again there will be no gray areas as our tax returns are straight as an arrow.

As for my business I am paid a salary. The rest is paid out as profit. The only advantage to this is you of course only pay FICA on the salary portion, not the profit portion.

There's nothing very complicated about it.

 

[The Paperboy]

I'm not worried about BHO's tax increases. My wife and I aren't at 250K yet but even when we are, we'll never show that much income on a tax return.

Just pray you are never audited. It's not fun. But again. you make my point that the middle class will eventually get hosed. My wife couldn't hide a penny of income and still sleep at night. It's just her nature. My recommendation is instead of trying to hide money just make more of it.

 

[bk1983]

Actually I made $298,109.00 last year but the taxable income was $193,924.00. So Obama's 250K tax will not effect me but:

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earlier in the thread you said you report net income which exceeds $250k, why are you disagreeing with yourself? you also claimed sales of "about a million" what is it??

 

[The Paperboy]

That's an easy one to fix. If you are the biggest salary on the books, and as owner, you should be, you can keep your income below 97K and put your spouse on the payroll even if he or she doesn't work at the business.

For us there is only one advantage to being an S Corp and that is that we can pay me a salary under 97K and distribute the rest as profit which you don't pay FICA on. It is totally above aboard and legal.

What is odd about it is determing what salary you should pay yourself as you could not find a job doing what I do. For years I did not even pay myself much of a salary; just took profits for the most part because I didn't want to pay FICA if I didn't have to. When we switched CPAs, the new CPA warned us in no uncertain terms I needed to start paying myself a substantial salary as it would be a red flag not to. So now I do. Trust me you never want to get into a battle with the IRS. Play it safe and play it very conservatively.

 

[The Paperboy]

earlier in the thread you said you report net income which exceeds $250k, why are you disagreeing with yourself? you also claimed sales of "about a million" what is it??

I looked at line Line 37 of my return which gives the adjusted gross income of $298,109.00. That is from my 1040. But what you pay taxes on is Line 43 which is $193,924.00. My apologies.

On my 1120S for the Corp total sales were $810,128.00 (Line 1C).

Now I've been very patient answering your questions. If you don't believe me that is fine. If Jillian would like me to PM her my personal info I'd be glad to do so provided she respects my privacy.

 

[The Paperboy]

So bk1983, what do you think about Obama's idea of fairness in the video below?

Actually I made $298,109.00 last year but the taxable income was $193,924.00. So Obama's 250K tax will not effect me but:

a. He will allow the Bush tax cuts to expire which will effect me and a lot of people making a lot less than me.

b. He wants to nearly double the Capital Gains tax which will effect me and a lot of other people making a lot less than me.

c. He wants to remove the cap on what level of income you pay FICA on which will effect me and a lot of other people making a lot less than me.

d. It is my opinion that he will lower the income level he wants to tax.

That being said I could go along with paying more tax if he frooze or cut spending. But he wants to increase spending by a trillion.

The other thing that really bugs me about Obama is his statement in the Democratic Primary debate that he want to raise the Capital Gains tax for "fariness" NOT because it would generate more revenue since the moderator pointed out that lowering the Capital Gains tax increased revenue.

Video here:

[youtube]<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/WpSDBu35K-8&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/WpSDBu35K-8&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>[/youtube]

 

[bk1983]

I looked at line Line 37 of my return which gives the adjusted gross income of $298,109.00. That is from my 1040. But what you pay taxes on is Line 43 which is $193,924.00. My apologies.

On my 1120S for the Corp total sales were $810,128.00 (Line 1C).

Now I've been very patient answering your questions. If you don't believe that is fine. If Jillian would like me to PM her my personal info I'd be glad to do provided she respects my privacy.

no thats fine, it is obvious you are lying. no need for verification, your answers prove the point. I am done with the subject,,

on the middle class getting hosed, well thats just another lie you came up with. Agency after agency who looked into his policy have stated that 94% of taxpayers will see a cut. The middle class benefiting the most.


also by your own figures the Obama plan will give you a tax cut of $4,156.62.