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TOPIC: Best Tax Strategies for reporting income from Websites
Best Tax Strategies for reporting income from Websites
22 Nov 2015 19:39 #229530
I've seen a lot of talk about different business ideas and projects that people are working on, but haven't seen much discussion regarding tax structures that people choose to use once they successfully earn profit, and must report their income to the IRS.
Earlier, I remember a post about Victor from B&D and Chris meeting up in Boise, Idaho for something business related. I looked around the Internet to see if I could find some tax benefit to filing LLC paperwork for a business in Boise. I didn't find anything useful. (If anyone knows what makes Boise special, I'm very curious to know why)
Given that you're:
- Live in the United States
- Earning an income off of website/s that you own through affiliate sales, and selling electronic goods
- Getting paid via Bitcoins and Clickbank sales
What's the best tax structure and state to register the company (within the United States) for the biggest tax benefit?
"Best" may be negotiable, but "very good" will suffice.
As far as structures go, I've heard that the LLC would be the way to go for a one man show website, since it offers a lot more freedom than an S-corp or a C-corp.
I've heard that New Mexico LLC's are good for hiding assets (but apparently useless in hiding anonymity for holding a business where you are earning taxable income)
I'd love to hear from any of you guys that have filed paperwork and what you've learned. One of the biggest goals in a business is maximizing profit, minimizing loss through taxes, and nullifying personal liability, and this nitty gritty stuff plays a huge role in that.
Good Looking Loser wrote: There's no tax advantage in Boise, ID. for me --- other than - I'm not in California where the taxes are sky high.
Most of my stuff is LLC, with an S-Corp election.
Don't put too much time into this, find an accountant that can answer your questions on the spot. That's my test for a good professional.
Tax structure is really another one of those 1% advantages/difference until you are making big money (5+ million a year).
Some people are under the impression that there's a lot of loopholes for blogging/online business that can make you avoid a ton of taxes --- there's really not.
The big discounts and loopholes exist for huge corporations that do 'research and development' in other countries, not for domestic USA small businesses. Think - Apple, Pfizer, Walmart, etc.
Florida, Texas, Nevada, New Hampshire (I think) are tax-friendly.
New York, Maryland, Illinois, California, other liberal strongholds are not.
Every else in-between is more or less similar.
Just pay yourself as little as possible, pay quarterly taxes and take out most of the rest as a quarterly dividend and invest it.
I'm a financial advisor with an independent wealth management firm in south Florida. We work with a lot of business owners and high net worth individuals. One of the best ways that profitable business owners can save taxes, other than setting up a 401K, is by setting up a 831(b) captive insurance company. The parent company would own the insurance company and pay insurance premiums annually that pay for enterprise risk insurance. The insurance premiums are tax deductible on the parent company's end and, as long as the premiums are under 1.2Mil/year, the premiums are tax free on the insurance company's end. That 1.2M cap might actually be increased to over 2M with some contingencies. Here's a link that talks about it:
There's a company we work with that acts as the captive insurance manager, who basically sets up the insurance company, manages it, etc. If the parent company isn't willing to pay at least 100K/year in insurance premiums, then it's not worth the time or money to set that up.
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