How often have you heard someone say, “i don’t pay any taxes. My accountant takes real exact care of me . . . I have not paid a dime in taxes in years.”
Does that outrageous declaration sound familiar?
Maybe it’s your brother-in-law, or a fellow soccer mother, or a co-employee at the office.
And so that you suppose to yourself, “what am i doing incorrect? How come i’m paying taxes and so-and-so says he/she pays not anything? How do they do it!”
Is it genuinely viable to pay “0 taxes”?
For functions of this article, allow’s deliver your “no-tax” friend or relative a call. Permit’s name him “charlie” (or if he’s a she, simply think “charlene”).
Ok, what’s charlie up to? What is his secret?
Charlie has no secret. He is no longer doing something which you ought to be doing. Do not be green with envy of charlie, and here’s why . . .
I will think of at least 5 motives you must ignore something charlie says about his “no-tax” state of affairs.
Purpose #1: charlie is a liar. Each family has one, so do not sense horrific. Let’s face it, a few people just like to indulge in fabrications to make themselves experience exact. Charlie is telling you a huge fat lie because charlie has “problems.” ’nuff said?
Cause #2: charlie is pond scum. Adequate, hear me out in this one. I don’t mean to offend you if charlie is a close and pricey relative, or your first-rate pal, however i’m going to give it to you instantly: charlie cheats on his tax return, and he cheats massive time. There are masses of folks available like charlie. He’s one of the motives that you and that i pay a lot in taxes — he would not file all his income, and he deducts bogus expenses by using the hundreds.
He and his accountant may additionally even be in cahoots in this. Charlie brings in his statistics and his accountant crunches the numbers, then calls charlie and says, “you owe $five,000.” so charlie rummages around in his files and by some means manages to come up with another batch of charges that miraculously
Reduce his balance because of zero. It’s like magic!
Stop result: charlie’s tax go back is a big lie.
Charlie is a thief. Charlie ought to be put in prison for the tens of lots in taxes he has illegally withheld from the government over the years.
Reason #3: charlie is stupid. Again, i’m sorry if i am being too tough on charlie. However a few people are so clueless approximately taxes that in the event that they haven’t any balance due on their return, or if they’re getting a refund, they mistakenly agree with they failed to pay any tax that yr.
And agree with it or now not, that is really a totally not unusual false impression that lots of people grasp to. Ah, to be so blissfully ignorant!
I hope you are not so naive to think that the “bottom line” to your tax go back tells the whole tale about your tax legal responsibility. It would not.
Cause #4: charlie is broke. Charlie may also honestly pay zero taxes due to the fact –are you prepared for this one? — charlie does not make any money!
Charlie owns a small enterprise or works complete-time at his self-employment activity, and charlie might also rake in hundreds of heaps in profits from sales of his product or service — however charlie’s business spends greater than it brings in, and charlie’s commercial enterprise has a loss each year.
So charlie would not truly have a tax hassle. As an alternative charlie has any quantity of other issues. He has a marketing hassle, or a control hassle, or a employees hassle. Charlie’s enterprise is failing, and paying zero taxes is just a symptom of a commercial enterprise with a view to ultimately near.
Cause #5: charlie is simply scraping by. Charlie’s enterprise might not be losing cash every yr, but it’s not really making tons both. He has a small income — enough to preserve him busy. His enterprise may also even “look” profitable, but it’s genuinely the conventional shoestring operation.
So now, i ask you, do you really want to pay zero taxes? People who don’t pay taxes are generally in this type of five classes: persistent liars, pond scum, silly, broke, or simply scraping through.
The reason of business is to be profitable.
The unavoidable result of a profitable business is taxes. And yes, you have to do everything legally feasible to reduce the ones taxes. But in case you are going to be successful, you’re going to pay a few taxes.
In terms of taxes, live away from charlie.
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