Codie A. Sanchez’s Post

Interesting insights!

Solid tips right here Codie A. Sanchez. This will certainly set people on their way.

I don't know how prudent it is to avoid taxes. Instead, Id love us to stop comparing ourselves to the rich, to try to play like the rich do, and instead, idk, have them pay their fair share? instead of having the plebs like myself avoid paying taxes, have the rich pay theirs. By constantly having articles and dumb blog posts saying advocating for "how the rich do things" let's form class solidarity and say, instead, "THE RICH SHOULD BE DOING THEIR FAIR SHARE" ugh.

The important costs such posts miss to include: - The cost of a tax preparer + payroll (or additional skills) The business owner needs to either hire a tax preparer (this would reduce the bottom line savings on payroll taxes) or to learn (1) how to do monthly payroll (2) how to do annual corp taxes and a state annual report. While Gusto and TaxAct will take an S Corp owner 100% there, it is the fear of math and IRS that keeps many from doing their own payroll and taxes. - The cost of time to collect on $100k of accounts receivables (unless some recurring revenue is possible) and tracking/accounting for $30k of write-offs. The cost of Quickbooks and owner's time or of a basic bookkeeper need to be added. -If within $30k of "write-offs" there is a home office depreciation, then, when this home needs to be sold, there is tax on depreciation recapture. Yes, it can then be rented or 1031ed, but, again, these are complications and additional headaches very few are willing to endure to save $10k/year. I am not suggesting not to start an S Corp, it is just more complicated than "$13,190 gets added to the bottomline because one has an S Corp".

You forgot the most important part: HOW to replace that W-2 job with a "business" 1-1. Zero actionable advice = cliche. Without 1) sufficient resources 2) business acumen AND 3) a sustainable business plan 90% of businesses fail in 3 years and the person is forced to W-2 again.

Great breakdown Codie. How would it work for an Independent Contractor I wonder? Thanks for the information.

There are so many things to consider before creating an S-Corp for your small business like: 1. Qualified Business Income Deduction (20% deduction on profit) 2. Your federal income tax bracket 3. Reasonable salary 4. Running payroll 5. Filing another tax return with the IRS and your state 6. Inheriting S-Corp stock 7. Should your business own real estate in a separate entity

Step 1: make millions of dollars

Please look into Reasonable Compensation laws before forming or electing to be taxed as a C or S corp; only to pay yourselves a ratio of 50% to 100% in distributions. This is an old trick in the book that the IRS caught on to a few years ago. Talk to your Accountant!

Codie A. Sanchez 🔥🔥🔥 Reducing taxes to 0 is everyone's goal Having a great tax lawyer or specialist is a must have