Two Tax System

We have a Two Tax System in this country.

One group pays a lot of taxes, one pays less taxes while each group might be earning the same amount of money. The difference is the group paying less taxes has the legal means to deduct expenses that allows their tax burden to be less.

I believe we all have the responsibility to pay taxes. I just don’t believe I should have to pay a penny more than I am legally required to pay.

Let me show you what I’m talking about…

Two Tax Systems

Employees get to write-off almost nothing, but businesses get to write-off almost everything. In 1913 when Congress created the income tax they setup two systems. One system for employees and the second for employers. Since virtually all taxpayers were self-employed, home-business owners (they were mostly farmers), the business tax system received preferential treatment. It hasn’t changed since then!

If you have a home-based business operated with a profit motive, you can convert a portion of your personal, non-deductible expenses to deductible, business expenses.

EMPLOYEES

Work Hard
Immediately Lose a Huge Chunk of the Wages to Taxes
Get to Take Home Whatever is Left After Taxes are Paid
Are Entitled to Limited Deductions

SELF EMPLOYED ENTREPRENEURS

Earn Money
Spend for Whatever They Want or Need
Pay Taxes on Whatever is Left Over
Deductions Include:
Mortgage Interest or Rent
Gas, Electric, Water, Trash
Cleaning Crews to Dust, Vacuum, Empty Trash
Computers, Fax Machines, Copiers, Telephones
Paper, Staples, Ink Cartridges, Postage
Desks, Sofas, Coffee Tables, and other Furniture
Painting, Wallpaper, Carpeting, Repairs/remodeling
Cell Phone Bills, Pagers, Tablets
Newspapers, Magazines, Books, On-line Media
Plane Tickets, Hotel Costs, Meals, Rental Cars
Lunches, Dinners, Ball Games, Theatre Tickets, Health Clubs
Security Alarms, Hidden Cameras, Guard Dogs
Health, Life, Dental, Vision, Disability Insurance
Company Cars (even boats), Airplanes
Gifts to Charity, 401k, SEP-IRA, Profit Sharing
Contributions to Employee Retirement Plans
Lawn Mowing, Landscaping, Snow & Leaf Removal
Holiday Cards, Gifts, Postage, Mailing Service, Flyer Delivery
Marketing, Advertising, Promotion, Business Development
Accounting, Bookkeeping, Legal Fees, Contract Labor
Printing, Copying, DBA filing
Bank fees, Interest expense, Business License
Website hosting, Website creation & maintenance
Internet Access, eFax, Training, Consulting, Tax Preparation
And just about any other expense that is “ordinary and necessary.”

If your home is now your primary business location, and if your business includes selling a range of products that require warehousing, the business use percentage of your home and garage may qualify for additional tax deductions.

Courtesy of Accountable Solutions.
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