If you are getting paid on a 1099 or own your own business under the statutes of a sole proprietorship, you are killing yourself financially! You are throwing away thousands of dollars to unnecessary taxes! What are those unnecessary taxes…Social Security! If you have been living under a rock for the last 60 years, you might think that Social Security is a blessing to look forward to in the near future. Let me tell you, it is not!
With that being said, why in the world are you letting your money go down the Ponzi scheme of the social security tax, when social security will not even be there when you become of full retirement age? If you are currently self employed or using a 1099 to get paid to you as an individual, you are hurting yourself and you are hurting your retirement. The reason, is that social security is taking about 15% out of your pay check.
You virtually will be working from January to May just to pay social security. The rest of the year you will finally be making money! Hip Hip Hooray, for making money! Instead you could be using those same months to actually make retirement investments! So you need to get rid of your social security taxes! How you say? By starting a corporation!
There are several types of corporations that you can get. A C-corp, S-corp, LLC, LP, and various few others! You should talk to your tax accountant to help establish which would be best suit your needs. But for a couple hundred dollars, you could literally save yourself thousands of dollars in your very first year of being a corporation! And if you can save that much money in your first year, imagine what you can save over your lifetime!
Once you have saved that money that you would have been throwing away to social security, reinvest it into something that will make you money! That can be anything from real estate, mutual funds, stocks, bonds, currencies, or even network marketing. Obviously the goal would be to make a passive income on whatever it is that you are investing in with your newly saved money.
One must understand the more a sole proprietor makes the higher the tax bracket that they are situated in. If they are in a higher tax bracket, they are losing even more money to taxes. This is why it is a great idea to form a corporation. There are many tax breaks that you will get outside of social security and income tax.
Once your corporation is set up there are other various tax breaks that can also give you huge tax advantages, everything from renting your own car to your corporation to having your corporation rent your office space from you! This goes on and on to the restaurants you go, to the utilities of your own home! There are literally hundreds of tax advantages of starting your own corporation! You can learn more about LLC from the book, “Limited Liability Companies for Dummies.”
If you finally want to get ahead of the game financially and stop getting slammed with the huge social security tax, I would highly recommend you start a corporation. This will change your life! The rich only get richer, because they know how to handle money! How do they handle it. Through corporations!
To start your own corporation by yourself I highly recommend MyCorporation.com.
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