Inc. and Grow Rich

Could we deduct for gas, cars (mileage used for business), Internet, 3rd bedroom as small office, webinar, un-sellable items, grad school, Community College?


When they say you deduct start-up costs what does that mean?

Taking a picture of the logo on the shirt, or keep a copy of the artwork, just in case you need to prove the deduction. With all deductions, keep track of you expenses and save your canceled checks and invoices.

Charitable Contributions are limited to 10% of your corporation’s net income.

First, education expenses are deductible (even if they lead to a degree) if the education that is undertaken 1) maintains or improves a skill required by the individual in the individual’s employment or other trade or business or 2) meets the requirements of the individual’s employer or the requirements of law or regulations.

Document, in writing, the business purpose of every class or seminar you take. Also, where appropriate, adopt an education assistance plan.

A corporation can pay up to $5,250 per year per employee for tuition, fees, books, supplies, etc., and the employee can exclude it from his or her income! Further the exclusion is available for both undergraduate and graduate degree programs and applies even if the employee is not seeking a degree. The courses covered by the plan need not even be job-related and could be courses involving sports, games or hobbies if they involve the employer’s business or are required as part of a degree program. Any excess greater than $5,250 would be included in the employee’s gross income and be subject to payroll taxes and federal income tax.

Save receipts for shipping, we could deduct for a phone, what about cell service? And what about monthly Internet? We’ll need to keep invoices, but would we ever have cancelled checks? Could I deduct 5-dollar cases sold for 1 dollar?

S Corp – may have multiple LLC’s underneath it, $400 in quarterly taxes

Stay sole proprietor until you think you’ve got something to lose.

The C Corporation is the only entity that is able to select a business year-end different from a calendar year-end. Only the C Corporation can decide “when to pay your taxes.” All other types of business structure are flow-through entities. “A C corporation is the dumbest thing you could do because of double taxation!” Then why is it the go to for the biggest corporations and has been around the longest as a structure?

Most expenses that a corporation pays are deducted against the income of the corporation, so there is no double taxation.

Verify that you have or will have sufficient non-wage income to justify a C corporation. Do not start a C corporation to own real estate!!!!! Verify that the tax benefits will outweigh the added cost and maintenance requirements needed to run a C corporation.

Rich dad poor dad, “S corporation stands for SMALL! The C Corporation is for people who want to think big.”

Knowledge = Money

For real estate, there was no LLC self-employment tax assessment.

LLC: they offer the advantage of limited liability, asset protection, flow-through taxation and discounted transfers of wealth. They offer flexibility when creating the operating agreement, which can be tailored to suit the simplest to the most complex business structures. They may not be appropriate for operating businesses due to all distributions being treated as self-employment income subject to self-employment tax.