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How can I reduce the amount of income tax I pay?

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posted on Apr, 29 2008 @ 10:54 AM
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If you have a hobby, start a home business with it. Setup up a small home office and then you can deduct a part of your mortgage/rent, plus any other expenses related to your business. If you do not make any money at your business, then the loss is tax deductible as well.




posted on Apr, 29 2008 @ 11:10 AM
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reply to post by TheComte
 


gotta be cautious with that. The IRS has rules against hobby losses being deducted. You need to be able to show that you are doing this as a business and not a hobby.

The most audits I see these days are schedule c audits.



posted on Apr, 29 2008 @ 12:42 PM
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I cannot believe this wasn't brought up: 50% of the budget goes to the military?!?!? Are you kidding? Did you just make this up? It's more like 50% of the budget goes towards entitlement programs.



posted on Apr, 29 2008 @ 01:16 PM
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I don't have the link in front of me, but a man just recently won a court case against the IRS. He asked his employer to be paid in silver dollars, at street value (currently ~$28/coin) and reported his income as single $1 coins (which is in fact the legal tender of the silver dollar). The IRS sued him, and they couldn't even figure out their own rules on the situation so the man won his case. Now, to find employers who will pay in silver dollars....



posted on Apr, 29 2008 @ 04:15 PM
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reply to post by Crakeur
 


Thanks for clearing that up. I wasn't 100% sure on the net loss deduction. I admit I am more familiar with Canadian tax laws. As you say, if you keep accurate records that show your honest efforts in trying to make a profit, I think they will tolerate several years of losses, no?
And I mentioned hobby only so it was something that the OP enjoyed doing on weekends or part time basis. I didn't realize there were laws regarding hobby businesses.

[edit on 29-4-2008 by TheComte]



posted on Apr, 29 2008 @ 04:40 PM
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reply to post by TheComte
 


they can audit you for a variety of reasons but, generally, what I see the most are clients with regular salaried jobs and schedule C losses (for their side business - not hobbies in their case) and the losses are reviewed by the IRS. in the case of my clients, most of them are artists (we handle a lot of artists) and proving this is more than a hobby can be tough but I've been lucky in that the ones that have been audited have pieces in museums around the world. hardly a hobby when your stuff is in the smithsonian.



posted on Apr, 29 2008 @ 05:10 PM
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Don't you need to get a business tax number? Both Fed. and state?

Reading these rule and reg's will put me to sleep.

Roper ( he who is looking to make more money or a way not to pay the bastards. :up



posted on Apr, 29 2008 @ 05:20 PM
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I also moonlight as an Income tax preparer.

wow was the 15th this year nasty. some dumbass came in at 11:45PM trying to get a schedule C done. I did it and efiled at 11:57PM. Hope he doesn't get audited although I told him he's on his own with this one if he does.

doing a Schedule C with an attached 2106 Form is a good place to start to deduct your business operating expenses. This works best if you make your money via cash or through a 1099-MISC. The goal is to show a Operating Loss for the year that is roughly equivalent to the 1099 you're trying to essentially write off.

With deducting business expenses the legitimacy of the deduction is really a subjective thing. The IRS lets a lot of stuff slide if it sounds like something technical or specific to your profession (they have no idea what you're talking about and assume it's correct and legitimate). Writing off furniture, although you can do it, is something they do understand. So if the furniture sounds like it's for office use. it's all good. If it sounds like to them that you're writing off your whole home's worth of furniture then Big Red Flag for them.

when writing off your computer or any electronics you generally have to write it off using a MACRS system. deducting only 1/5 the cost of the computer on each years tax return for 5 years. however on small items that are not list property (cars) like computers you can do whats called a 179. which allows you to write off the complete cost of the computer without trying to depreciate it. also don't forget to say that the computer use or cellphone use or ISP use is 100% business purposes or you'll have to find what percentage you do use for business and only get to deduct that part.

I STRONGLY URGE YOU TO NOT TRY AND DO ANYTHING FANCY WITH REGARDS TO WRITING OFF HOME OFFICE EXPENSES!!!!

Keep the home office expenses down to something very reasonable. Home Office expenses are the NUMBER 1 Red flag for the IRS this year because so many people are abusing it.

You can't expense off the rent for your home but the amount of square footage that you use exclusively for the home office in ration to the square footage of your house/Apt can be deducted as a write off. Ie...home office is 10% square footage of apt. rent is 10000 a year. you can deduct 1000 (10%) for the rent of that home office. home Office write offs have a lot of little laws that exclude lots of people from using them, and this is why they get red flagged and audited too. Please don't try and write off a duel use room either. like a home office/guest bedroom. home office/ dinning room etc. that is illegal too and one of the things they try and get you on.

Edited Shady Schedule D tricks out. Not really legal.

Self incorporating ones self is an excellent idea. Running a sole proprietorship is also a good one. Just don't get into LLC's LLP's or S-Corps or you'll have to file an attached Schedule K which will screw up your returns write offs because the write offs will have to be shared with the other partners with the company and that can get messy.

I know Tax seasons over, but if anybody has any questions or concerns regarding their taxes or taxes in general feel free to IM me.

[edit on 29-4-2008 by BASSPLYR]



posted on Apr, 29 2008 @ 05:20 PM
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Was the OP by Wesley Snipes?



posted on Apr, 29 2008 @ 05:24 PM
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Originally posted by Crakeur

Originally posted by GeneralT.
Simiply refuse to pay them and when they come for you, ask to see the written law giving them the right to charge you taxes. They will not be able to show you the law cause there is none.


then you can share a cell with Wesley Snipes. There is a law and so far I have yet to find someone who has won their case and not paid any taxes or gone to jail or some combination thereof



The IRS operates illegally, like the mafia. The Federal Reserve is a run-for-profit corporation. Detaining and/or seizing property of one who does not pay the tax is illegal. Oh, and the 16th amendment was not fully ratified.




BTW, if you are an American citizen, and move to another country, Uncle Sam will STILL tax your foreign income!



posted on Apr, 29 2008 @ 05:26 PM
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crakeur,

you sound like you've got lots of knowledge regarding tax law. Are you too also a tax preparer? Sounds like you know a lot about taxes.
always a good thing to know.

In fact I urge everybody to learn as much as they can about taxes, it will give you a leg up in understanding how the rich make and keep all of their money, and it's an eye opener about the various ways one can make income.


DUH...Just saw Crakeur's avitar thingy right under his name is says controller. So you're probably a CPA, CFO or something. You say you work with a lot of artists at the firm you work at. Very cool. my day job deals with artists on the business management side of things. Any advice on passing the series 7/66 exams?

[edit on 29-4-2008 by BASSPLYR]



posted on Apr, 29 2008 @ 05:38 PM
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Originally posted by undecided2
I cannot believe this wasn't brought up: 50% of the budget goes to the military?!?!? Are you kidding? Did you just make this up? It's more like 50% of the budget goes towards entitlement programs.




Did the MILITARY, or "official sources" claim that 50% goes towards "entitlement programs"???



And can anyone believe "official sources"?



www.warresisters.org...



According to the pie chart, 54% of the funds go to the military, including, but not limited to, Iraq, the finding of regional international conflicts, the war for global government, and "black budget" operations.



Is the government regulated on how it spends its money? The less regulation, the more lies and corruption.



posted on Apr, 29 2008 @ 08:06 PM
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Money is BS!!! I think money should be eliminated on this planet and instead we setup a trade system without the use of money, i make a cake you give me some milk from your cows type system, this all needs to be done through the art of love though to work...money is killing this planet moreover the humans who greed for more of it...



posted on Apr, 29 2008 @ 08:11 PM
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Thetruth777,


Just an FYI... This is not an easily beatable system unless you are incredibly wealthy. That said if you are truly interested in paying LESS taxes I advise claiming 0 dependents. Your paycheck may shrink by a few dollars, but dependent on your income you will get back close to a thousand dollars (over30k make that a few thousand) so you get more money taxed, but you actually will see 90% of it back(as you will have paid too much in taxes.

now to the further point of your thread, as much as I hate to say it... The IRS is a part of the government. They don't give a damn if the burden of proof lies on them, as they have no one to answer to. This plays into my opening sentence. If you have the money and the attorneys to fight the government, you might be able to make a valid argument. But unless you're incredibly wealthy, all you would be doing is setting yourself up for a possible jail sentence.

Take care!

Coven


P.s. to all the ATSer's Don't spend your $600 refund in one place...



posted on Apr, 29 2008 @ 08:26 PM
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Originally posted by coven
That said if you are truly interested in paying LESS taxes I advise claiming 0 dependents. Your paycheck may shrink by a few dollars, but dependent on your income you will get back close to a thousand dollars (over30k make that a few thousand) so you get more money taxed, but you actually will see 90% of it back(as you will have paid too much in taxes.


not how it works. if you claim 0 dependents, more money is taken out of each paycheck to cover your taxes. if you claim 10 dependents, less money is taken out to cover the taxes. the taxes will remain constant. the overpayment or refund will change based on your withholding.



posted on Apr, 29 2008 @ 08:32 PM
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Originally posted by Crakeur

Originally posted by coven
That said if you are truly interested in paying LESS taxes I advise claiming 0 dependents. Your paycheck may shrink by a few dollars, but dependent on your income you will get back close to a thousand dollars (over30k make that a few thousand) so you get more money taxed, but you actually will see 90% of it back(as you will have paid too much in taxes.


not how it works. if you claim 0 dependents, more money is taken out of each paycheck to cover your taxes. if you claim 10 dependents, less money is taken out to cover the taxes. the taxes will remain constant. the overpayment or refund will change based on your withholding.





But my question is: if I claim 3 dependants, will the IRS run a background check (at least on 40% of the taxpayers) to verify the validity of that claim?



posted on Apr, 29 2008 @ 08:35 PM
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Originally posted by thetruth777
And, unfortunately, the Supreme Court is virtually DOMINATED by the feds, so tax resistance just DOESN'T WORK! And to top things off, Ron Paul is thrown out of the campaigns.


So how can I, LEGALLY, decrease the amount of money I pay to my "beloved country"?


This ones is pretty simple ... leave the country.

Seriously. If you dont like paying taxes and funding government projects (I assume you like driving on paved roads, right?), and you are unwilling to run for elected office and change the system the way its designed to be changed ... then leave. Move somewhere else where your beliefs match the governments objectives.

Your new homeland may not have paved roads, or clean drinking water, or a relatively safe food supply, but then you dont have to pay taxes to support the evil gub'ment.



posted on Apr, 29 2008 @ 08:38 PM
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I have two part time jobs....one is playing poker...tax free. The other job is taxed way too much. Are there any other lines of work that are tax free or tax lite.... You could work "under the table" like millions of our friends previously from south of the border.

Other tax free enterprises

organized crime
prostitution
gambling
etc.....



posted on Apr, 29 2008 @ 08:42 PM
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Originally posted by Drikanna
I don't have the link in front of me, but a man just recently won a court case against the IRS. He asked his employer to be paid in silver dollars, at street value (currently ~$28/coin) and reported his income as single $1 coins (which is in fact the legal tender of the silver dollar). The IRS sued him, and they couldn't even figure out their own rules on the situation so the man won his case. Now, to find employers who will pay in silver dollars....



I read about something similar as well. I think it is a very creative way of avoidance. the man should be left alone purely for the sake of his creativity. The case I actually heard about was about this multi millionaire that owned several businesses and paid many of his employees and contractors in silver dollars. It was a winn win for him he got the write off the labor expense at the full value of the coins while his employees were able to claim only a small portion of their income and thus beacuse it was under the minimum threshold they paid no taxes.

It worked like this I gree to work for you in the amount of $1000.00 a week. However rather than paying me in dollars I would prefer if you paid me an equivilent value in silver american eagles.

Thus I recieve my $1000.00 in the form of about 30-40 silver eagles which show a face value of 1 dollar each. Since the face value of the coins are 1 dollar and will only be accepted as one dollar so if I try to spend them at the grocery store I will only report the face value of the coins I recieved as income. Thus I am only reporting yearly income less than $5000.00 a year minus a personal exemption of $5000 leaves me to pay no taxes.

The really funny thing about this case was that at one point when the lawsuit was filed the man paid for his court costs in silver dollars thus establishing their currancy value to be one dollar.

THe bad thing is the Feds raided his businesses and gave and probably still are giving these people a terrible time. I'll see if I can find the link but sometimes I find things while surfing never to be able to find them again.



posted on Apr, 29 2008 @ 08:46 PM
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Originally posted by coven
Thetruth777,


Just an FYI... This is not an easily beatable system unless you are incredibly wealthy. That said if you are truly interested in paying LESS taxes I advise claiming 0 dependents. Your paycheck may shrink by a few dollars, but dependent on your income you will get back close to a thousand dollars (over30k make that a few thousand) so you get more money taxed, but you actually will see 90% of it back(as you will have paid too much in taxes.

now to the further point of your thread, as much as I hate to say it... The IRS is a part of the government. They don't give a damn if the burden of proof lies on them, as they have no one to answer to. This plays into my opening sentence. If you have the money and the attorneys to fight the government, you might be able to make a valid argument. But unless you're incredibly wealthy, all you would be doing is setting yourself up for a possible jail sentence.

Take care!

Coven


P.s. to all the ATSer's Don't spend your $600 refund in one place...

I was going to post it but i found this guys post.I pay more off my check and always get a refund.Pay more taxes get more back.Most of us dont have lawyers to fight it in court so easier to go with the flow.Govt being able to tax people IS in the constitution.Where the confusion is the fact that one amendmant wasnt ratified to enable an entity to take over the printing of money.
Before anyone uses Freedom to Fascism vid,save it.Ive seen it and its really nothing more than opinion with no hard facts.Aaron russo also spoke of a conversation with the Rockafellers that might have happened or not.Since Russo is dead now, theres no way to confirm that Rockafeller actual said those words either.Rockafeller wasnt in the conversation at all as far as im concerned,all i heard was Russo's voice.This is partially how conspiracies work and get started.A small truth(usually not that significant)ballons into a world wide conspiracy on...here say.



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