Each January, Americans cringe as tax season nears. This is validated throughout the month as W-2’s reach our snail mailbox.
Sole proprietorship and taxes
I learned from my dad, who operated a sole proprietor construction company, working for yourself is the key to retaining income.
He always told me, “Son, you’ll never be happy working for someone else.” And so, I listened as well as any adolescent boy listens – in one ear and out the other.
I didn’t understand what he meant about working for myself until I finished college and began working a 9-5 job, in which, I quickly learned making more money resulted in a higher tax bracket and increased taxes.
I started doing my own taxes in hopes of learning how to retain more of my income. As a result, I studied publication 17, Your Federal Income Tax on the IRS website, as well as, publication 535, Business Expenses.
It was then I understood what my dad said about business ownership.
Today, I offer freelance writing services to clients around the globe, monetize websites and teach college courses online. These three occupations allow me to write off everyday expenses as a sole proprietor – expenses employees of a company couldn’t.
Unlike most employees, I don’t dread tax time. Sounds sweet, doesn’t it?
Reinvent yourself and offer a service online
In addition to side jobs, I’m a full-time employee but being a full-time employee doesn’t preclude me from reaping the benefits of owing a business. Not only am I writing off more expenses and getting more money back at the end of the year, I’m also creating an additional stream of income.
Why is that important? It means I’m becoming self-reliant.
Many believe job security exists. I don’t. Many believe obtaining a job at any level of government guarantees them a lifetime of employment. I don’t, and that’s from someone who’s worked in some form of government their entire career.
Think of it this way, you’re one accident away from insolvency if you’re in manual labor. You’re one budget cut away from losing your government position. God forbid, you’re one disaster away from using up all your sick and vacation time.
To get more back on your taxes, you must venture out of your comfort zone and offer a service or sell a product that enables you to write off day-to-day expenses. Harness the power of the Internet and set up a store selling arts, crafts or information.
If you want to venture out of the country, look to companies assisting people break into new markets such as a Switzerland company registration.
Really, the opportunities are limitless. You just have to believe opportunities exist.
Other articles from Josh:
4 Key Steps to Making Money Online Selling on Ebay
How I Used Bad Money Advice to Set Financial Goals
Make Money Online: My Secret to Easy Money Online