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1. Anyway, I think I am paying too much... What do you guys think?
2. Is there anything I can do to improve this?
3. Will I get a lot of them back on Tax Refunds?
4. Any tips/suggestions? Thanks a lot.
1. No, that's about what I paid as a single person. I always assume I only take home about 60% of my gross income.
2. You can be born ultra-rich and get all your money from investment income you don't/didn't work for. Then you will only pay 15%, but probably a lot less since you will have access to tax shelters, offshore accounts, and the like.
3. You'll probably get back about a grand.
4. Donate to charity and deduct that. Max out your 401K if you have one. Buy a bunch of capital goods (fancy cars, business equipment, etc.) and take advantage of all the loopholes. Buy a house and deduct the mortgage interest.
4(for real): No. The tax code is written to benefit the wealthy and those with disposable income to buy expensive toys, and only half-screw the poor. If you're in the middle buying day-to-day household essentials you get shat on and also told you are a mooch by the rich, because they pay "9X%" of the taxes but apparently begrudge every penny.
Buy a house. Seriously, the deduction is pretty good. And its generally cheaper then renting after a couple years.
I pay more in taxes, but make 50% more. Once you get over 100K you can start investing more and having a lower rate since the capital gains rate is so low. Basically you arent rich enough to earn money by not working, and getting cheap taxes, and you're not poor enough to get a lower rate. Welcome to the shrinking middle class. Try and get over the hump via investments.
Not really. When my spouse and I were both working we added up all taxes so besides income/employment tax we calculated property taxes, sales taxes, various excise taxes, etc. Even though we were clearly middle class we paid well over 50% of our earnings in taxes.
You are either lying or you have the worst accountant on the planet.
You're young and have gotten your feet wet in owning a business. If you want longterm tax advantages and have the right temperament, I'd suggest you explore the possibility of growing your business - especially in our current/future job market. (You may get a few posts now about how many businesses fail...). Why are you not making more profit at your sw co?
Grow my business how? Make it an LLC? Hire more people?
It's a pretty new company. I made a lot the first month but the market crashed or something, all of the companies in my niche, including competitors started doing bad.
Then I created a another Software as Service company, as soon as I released it. The market crashed. It was a Guest Blogging trading platform, where users were able to trade guest blog posts for more traffic and exposure. However, 3 days later, Google announced "Guest Blog Posting is dead". So that's why I got a job. I thought I would be working while I think of my next business idea.
Back to the question, would I be able to get tax advantage if it's a MICRO-ISV (1 person) company? or do I need to grow it?
Grow my business how? Make it an LLC? Hire more people?
It's a pretty new company. I made a lot the first month but the market crashed or something, all of the companies in my niche, including competitors started doing bad.
Then I created a another Software as Service company, as soon as I released it. The market crashed. It was a Guest Blogging trading platform, where users were able to trade guest blog posts for more traffic and exposure. However, 3 days later, Google announced "Guest Blog Posting is dead". So that's why I got a job. I thought I would be working while I think of my next business idea.
Back to the question, would I be able to get tax advantage if it's a MICRO-ISV (1 person) company? or do I need to grow it?
John....my business will never make any profit. (just be able to show an attempt)
That is how you write off your costs to get back the money from your job.
You need a great CPA and don't say you can not afford it......that too is a write-off.
I brought up growing your business as a long-term strategy if you want to keep your taxes down. There is no "check list" for this - learning comes from trying and sometimes failing, which you are doing. It sounds like you have the entrepreneurial spirit so I would keep at it, keep learning what works while you keep your day job.
Business ownership and real estate investment are major channels for reducing taxes. Being an employee - not so much.
In the short-term, as Driller1 mentioned, you need to show you are attempting to make a profit and talk to a CPA.
You better find some woman to marry you,or have some lady pop out a couple of kids for you,otherwise,well,you get the idea.
I think its never,ever a good idea to adjust the w4 by adding an exemption.
What he needs is to manage his business in a way to get back all of his tax money but FICA.
He will always be stuck with FICA until he is totally self employed and still showing a loss on his 1040.
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