[Rhodes22-list] Tax Advice?

[Bill Effros]

Slim,

In terms of taxes my situation at your age was similar to yours, except 
that I was selling computer consulting.  Here is what I did, it was a 
successful strategy:

1.  Never cheat on taxes!

2.  No matter how much you make, you can't make enough, simply selling 
your labor, and you can't keep enough, no matter how much or little you 
make, because of taxes.

3.  Defer as much tax liability as possible without using the strategies 
most people use--401Ks; Keoghs;  Roths; Insurance plans.  (I have been 
deferring taxes for my entire working life, without ever expecting that 
a political shift would so alter the tax structure that I would never 
have to pay taxes at all--yet that is just what happened.  I think 401Ks 
etc. are a bad bet because I think you are now deferring taxes from a 
historically low tax paying time, to a time when you will pay more taxes 
on what you withdraw later than you will if you pay your taxes now.)

4.  If you are healthy, get medical insurance with an enormous 
deductible.  I pay all my medical bills, however I never have to worry 
about dying for lack of funds--my health insurance will cover that.  I 
probably pay less for medical expenses than anyone else on this list (if 
you count as salary the amount large companies are paying for their 
employees' health insurance, and the amount the government pays for some 
people.)

The exact strategies I used won't work again--you must find a new set of 
strategies for the current time; but the principles remain the same.

Bill Effros

 

Slim 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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