Tax Advantage in home based business, network business or side business

I wrote about loan payment accelerator. Now this is about how to make extra payment money.

If you know some restaurant ower, they may have nice car. Some people say they can buy because it is tax write off (business expense).

It might be true, but not all true.

You don't need to be restaurant owener to have tax advantage of small business.

It can be sole proprietor or network business. You don't need to have LLC, S corp or C corp.

Right drawing shows tax in California. If you have about $50k income. Federal income tax is about 30%. California income tax is about 15%. So total tax is about 45%.

1 year 12 month of 45% is about 5 month. But the 45% of tax is originaly your money.

If you have business you will have some control.

If you have started business and $10k of business loss. It will be like next drawing.

I know you don't want to have loss in business. But more likely you may have loss in the begining.

If it has business purpose, your personal expense can be business expense. You may have cellphone, computer, car, business travel, business meal & entertainment.

For detail it's better to ask your CPA or tax attorney.

When you file tax, W2 income goes to 1040. 1099 business income goes to Schedule C. But I explain in simple combined.

Last drawing shows just total. You had -$10k. So total income shows as $40K. Tax bracket may be change, but let's calcurate as 45% for now.

Then tax is $18k. It was $22.5k originally. So $4.5k (about 9% of W2 income was saved).

These are just basic idea. You need to have "intention to profitable business" and record.

But you can learn quickly.

You can do any kind of business. But I'd suggest you to have a network marketing business. Because the products & service is for all. So your potential customer is everywhere.

My parents & sisters are in glyconutrients business with me. So I call to Japan or visit, it it tax write off.

If you're interested in tax advantage but not sure what kind business you want to do, please contact me.

I show you why I choosed glyconutrients business and think it is happiness business.

Tax Diary: http://tax.hada.us
-Naoki