Quote:
Originally Posted by Driller1
What most people miss is the fact we are NOT taxed on what we make. We are taxed on what we keep. The IRS wants us to keep the money moving.
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Yes a very good point.
If your costs of doing business are high;
if your education spending is high;
if your medical spending is high;
if a lot of your assets depreciate;
then it is very possible to be grossing $5million a year, and yet to 'Net' almost nothing, and to have an AGI that is negative.
In 'the Millionaire Next door' are hundreds of businesses showing these things. You can not always control your gross income. but you can control your spending.
If you spend your money on a high 'cost of business' then nobody can take that money away from you.
And if your business costs include assets that depreciate [like a well drilling rig] then your set.
Everyone has medical expenses. A wage slave pays his doctor with post-tax money. A business owner pays with pre-tax money.
Everyone can take college courses or attend a trade conference. A wage slave pays with post-tax money. A business owner pays with pre-tax money.
It is all in your mind. If you insist that you must be a wage-slave then you are.
If you know you are a business owner, then you are.
How many companies have both employees and contractors? What is the difference?
employees have taxes taken out from their paycheck by their employer.
Contractors don't pay taxes, they 'file' taxes and document all of their expenses.
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