Quote:
Originally Posted by Ron Bennett
Incorporation / forming a LLC to keep much of the revenue within the corporation / leverage ... then as for income - one can often take some as a "distribution" instead of straight income. Services of a reputable CPA tax accountant can make a huge difference in reducing one's business tax liability.
With all that said, yep, the tax system is tilted to favor the rich - more specifically, the super-rich. Using traditional off-shore accounts to illegally avoid taxes is so yesterday and generally only "penny" millionaires who don't know better / greedy do that (FATCA legislation is aimed primarily towards that group)...
The super-rich operate in a totally different legal sphere with the ability to avoid taxation legally through the use of off-shore entities; incorporation off-shore and then, to put it in simple layman terms, shifting expenses to higher tax countries and the profits towards lower tax ones.
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Yup. I have an LLC setup to be taxed as an S-Corp. This allows me to pay myself a reasonable salary, which will include all of the usual tax, SSI, medicare, etc. deductions and I am also entitled to take out money as a member that doesn't have to have social security and medicare taken out of it.
Only downside is that in this state you have to have unemployment insurance what that arrangement even if the only employees are also members. So I do pay 2.7% that I wouldn't normally pay, but considering I'm saving roughly 15 or 18% or whatever on what's not taken out as salary, I end up better off.
I also have an individual health insurance insurance policy, but my company pays it for me and the amount comes across onto my W-4 tax free.