Corporations get all the breaks! For those of you who think Republicans are too 'pro' corporate tax breaks, get a load of this:
http://news.google.com Mon, 10 Feb 2014 18:10:33 GMT
Cuomo Wants To Give Banks & Corporations $400 Million In Tax BreaksGothamistA committee of experts ordered by the governor to review the state's tax code and make recommendations issued a report this fall [PDF] that stated 'New York's taxes are too h ...
We have a major Democrat singing the supposed Republican tune! The real lesson here is ALL politicians are pro-corporation! So the little guy gets crushed even more under the tax burden foisted on them by politicians giving more and more breaks to corporations. What to do? I'll tell you what to do, get in on the action with your own corporation, that's what! I know you think it's really complicated and a lot of times it is; but you can keep it simple.
Consider this, you are an employee earning $ 50,000 per year. Obamacare has your employer sweating. You incorporate and only you are employed by your corporation (called YOU Corporation). Now you can go to your boss and offer to be a leased employee to your boss and his company now doesn't have to handle payroll, health care and other employee 'benefits'. And, you are not an employee for Obamacare purposes. Normally, corporations have to match employee SS payments of 7.65 percent PLUS pay unemployment tax. Now you can offer to take that off their hands for, say, 5% more to your own corporation and they don't even have to issue you a 1099 because corporations are not required to issue 1099 forms to other corporations and they now have less administrative costs because they only have to pay your invoice. So now, your new little corporation has revenue of $ 52,500 which is still less cost to your now former employer than you were as an employee. As the owner of a corporation that has not made the 'S' election (and, please, don't do that!), you have control over the type of compensation you get that you did not have as an employee. One of the standard reasons for setting up a regular corporation (called a 'C' corporation) is for income splitting. Watch carefully. YOU Corporation pays you rent for the office you WILL have in your home. You have to have a place to do administrative work. Let's say $ 18,000 per year (no Social Security or Medicare is payable on this income, a savings of $ 2,754.00). Now you have to pay wages and let's say $18,000 per year for that, too. You are now in a lower income bracket. Now YOU Corporation can own property and owning a car is a prime requirement (say, $ 30,000). The corporation can depreciate the car at $ 6,000 per year, NON-CASH expense. That means you get the expense but keep the cash. It really does. Now your Board of Directors has to have regular meetings at locations determined by the Board, which sometimes look an awful lot like vacation spots. Let's say quarterly. Your corporation needs Internet and Telephone service as well. YOU Corporation does have some expenses you wouldn't have otherwise like Franchise Tax, State agent and such. Usually, it comes in at about $ 500 per year. Plus, you'll have equipment expenses such as replacement computers easily at or near $ 1,000 per year. Does anything sound strange? That's because nothing is. To sum it up, If you earn $ 50,000 as an employee, after taxes, telephone, Internet, equipment and travel (vacation) you'll have about $32,500 disposable income. If you have a corporation, you'll have over $ 37,000 in disposable income. Yes, you do have to file forms with Uncle Sam but the savings in taxes means you'll get about $ 135.00 from Uncle Sam for each form you file.
Does this interest you? Let me know if it does. Don't worry about the double taxation of corporate income. That only happens when a corporation issues dividends. YOU don't have to pay dividends. No corporation is required to do so.
I don't want you to believe this is a cinch because you have to do some work and take responsibility for your situation. If you are not willing to do so, don't start. If you are the type who wants more control over your situation, drop me a line and we'll discuss it.
Remember, you CAN become your own corporate fat-cat.