richardhutnik said:
Kasz216 said:
richardhutnik said:
Anyone who is well off, will likely get adviced by their accountant to incorporate themselves, and set up a business, in order to change how they are taxed, and keep their taxes as low as possible.
As far as why the comparison, someone said that rich people pretty much cheat to get where they are. I commented to that by saying people who are rich play by different rules than people that aren't. This is what I was commenting on. Individuals incorporate themselves. And it was in response to this quote:
Galaki said:
To get rich quick, you don't play the rules.
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I think you have it backwords... if they incorporate as an intependent contractor it's so their buisness pays less taxes.
If you own your own single person company your still taxed on everything you pay yourself at the regular rate.
You yourself aren't incorporated. If you say, default on your morgage, you can't protect yourself via your corporation.
The "Tax benefits" are that you aren't taxed on anything kept in the company to increase the buisness of the company....
and anyone who has like a thousand bucks at most can do it if they really want to.
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And I was saying here that someone making a lot of money will end up incorporating themself, usually as an LLC, for a number of reasons, to obtain benefits from the legal and tax code that non-corporations don't face. You then structure your income and so on, in the form of a business, and maximize the tax code benefits. There are ways to do that, and people with money will do this.
What one can do, if rich and incorporate, is put the house in the name of the business. This is done to take advantage of the tax code, as I stated before. Again, the rich play by different rules than everyone else, as I said before:
http://www.llc-made-easy.com/how-to-incorporate.html
It doesn't make much sense for an average joe, living paycheck to paycheck to do this, but the person with money, it does.
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You do realzie that your link totally disagrees with the arguement you've put forth right?
"As far as deducting personal expenses from your taxes, you can never deduct any expenses that are not made in the ordinary conduct of a business or are reasonable to the conduct of your business."
It's actually directly illegal to put your home on there.
You CAN claim a home office if you work from home.... that's about it... but even then you have to pay rent to your buisness company, which then can not leave the buisness without it getting taxed personally. Also to qualify you need to A) Use your home office regularly. B) It can ONLY be a home office, the room can't have anything non-office in it. C) Must prove you do major acts of buisness from there. Such as pay bills, meeting people there or buinding stuff.
Furthermore, most rich people ARE salaried workers for other people. That's what CEO's are for example.
Sure LLC's and S Corps (there are more of these then LLC's) are great for people with their own buisness.... but that goes for those who are rich, as well as those who just have their own etsy store selling bracelts they make from Johanns fabrics.
