[Rhodes22-list] Tax Advice?

[Brad Haslett]

Slim,

You cannot avoid taxes, you can only defer them.  For a sole proprietor with
no employees, an S corporation isn't worth the hassle.  Depending on how
expensive it is to set up in Minnesota, a Limited Liability Corporation,
(LLC) may offer you a few tax advantages, but not many for the extra expense
and hassle.  Whether S or LLC, all income and expense flow through you and
you are already eligible for the same expenses, ie, car, telephone,
computer, musical equipment, etc.  Either one would give you
*some*protection from liability, but you are the only employee you
have to worry
about throwing a beer bottle at a customer or running someone off the road,
and you probably already have insurance for that.  "Piercing the Corporate
Veil" is pretty easy to do with a company of one. Health insurance is damned
expensive for individuals and small companies.  When you find a solution,
let me know, I'm looking myself.

You're doing the right thing with your retirement accounts, just don't
forget, you're nearing the big five-O and the funding limits increase for
most retirement accounts.  What pleasure!

In case you get fed-up with paying taxes, do what a former co-worker of mine
did.  Google Vernie Kuglin.  Vernie and I were new hires together but she
retired recently.  She beat a criminal charge of not paying taxes (it is
easy to find 12 peers who hate the IRS) but nobody beats a civil case for
not paying taxes, nobody. I don't think her fifteen minutes of fame was
worth it.  Remember how Al Capone got busted.  The IRS got him for tax
evasion and threw him in jail in Memphis.

When I worked part-time for a CPA firm the motto at tax time was "nobody
goes to jail for taking a deduction, only for not declaring income."  Play
hardball with the IRS but pay your taxes!

Brad


On 11/12/06, Slim <salm at mn.rr.com> wrote:
>
> My company pays taxes.  I run a company of one.  I'm the chief, cook and
> bottle washer.  I file as a self-employed independent contractor and pay
> taxes every year.  I'm sure I could find a crooked accountant to figure
> out
> how to show a loss every year.  Am I being stupid not to?  Is it worth
> looking over your shoulder for the next 7 years?
>
> I could form a S-Corp and avoid some taxes and other liabilities and be
> eligible for group health but there's some up-front expense that I'm not
> sure I'm ready for.  I don't know.
>
> I invest in my SEP IRA (mutual funds) and also my ROTH IRA.
>
> Any advice?
>
> Slim
>
> On 11/11/06 9:28 PM, "Brad Haslett" <flybrad at gmail.com> wrote:
>
> > MJM,
> >
> > You are correct.  Companies don't pay taxes.  They build the cost of
> taxes
> > in to the cost of their goods and services and the consumer pays the
> taxes.
> > When companies distribute profits, the shareholders (who are the ones
> who
> > pay taxes to begin with) are taxed again.  It really is that simple.
> >
> > Brad
> >
> >
> > On 11/11/06, Michael Meltzer <mjm at michaelmeltzer.com> wrote:
> >>
> >> There is a simpler problem, the only people who will pay taxes will be
> >> people with w2 income, everyone else including the company will figure
> a
> >> way
> >> out of it. It really that simple
> >>
> >> -mjm
> >>
> >> -----Original Message-----
> >> From: rhodes22-list-bounces at rhodes22.org
> >> [mailto:rhodes22-list-bounces at rhodes22.org] On Behalf Of Philip
> >> Sent: Saturday, November 11, 2006 8:59 PM
> >> To: The Rhodes 22 mail list
> >> Subject: RE: [Rhodes22-list] Taxes.
> >>
> >> Bill,
> >>   Not distribution but re-distribution.  I don't like anyone taking
> from
> >> me
> >> to provide to others.  That should be charity.  I like to enjoy the
> fruits
> >> of my labors, and I resent others enjoying the fruits of my labors when
> >> they
> >> are not entitled to them.
> >>
> >> Philip
> >>
> >>
> >> -----Original Message-----
> >> From:   rhodes22-list-bounces at rhodes22.org
> >> [mailto:rhodes22-list-bounces at rhodes22.org]  On Behalf Of Bill Effros
> >> Sent:   Saturday, November 11, 2006 2:37 PM
> >> To:     The Rhodes 22 mail list
> >> Subject:        Re: [Rhodes22-list] Taxes.
> >>
> >> Philip,
> >>
> >> It's always a distribution of wealth issue.
> >>
> >> Bill Effros
> >>
> >> Philip wrote:
> >>> I don't mind paying my fair share and I don't care if it is going to
> the
> >>> Constitutionally authorized appropriations.  I resent paying when it
> >> becomes
> >>> a distribution of wealth issue.
> >>>
> >>> Philip
> >>>
> >>>
> >>>  -----Original Message-----
> >>> From:         rhodes22-list-bounces at rhodes22.org
> >>> [mailto:rhodes22-list-bounces at rhodes22.org]  On Behalf Of
> >>> R22RumRunner at aol.com
> >>> Sent: Friday, November 10, 2006 2:37 PM
> >>> To:   rhodes22-list at rhodes22.org
> >>> Subject:      [Rhodes22-list] Taxes.
> >>>
> >>> Brad,
> >>>
> >>> I am neither conservation or liberal. My wife swears I'm a closet
> >>> conservative, but I deny all.
> >>> I am glad to have the opportunity to pay taxes. As a citizen, I accept
> >> the
> >>> responsibility and make every effort to make my tax returns as
> accurate
> >> as
> >>> possible.
> >>>
> >>>
> >>> Rummy
> >>> __________________________________________________
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> >>>
> >>> __________________________________________________
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> >>>
> >>>
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> >>
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