Tags: business activity, business trip, cash flow, financial objective, financial position, financial responsibility, financial system, income tax, personal budget, personal expenses, personal income, tax calculation, transportation costs
Too many people do not make the effort and sacrifice their time to decrease their exposure to tax while they spend too much effort on increasing their income. In fact, these two objectives should be followed at the same time as this would give the most cash flow – the most incoming money with the lowest effort needed.
Some key characteristics of a personal budget are below:
- A budget would definitely help in making your financial position more obvious and easy to understand and comprehend. This is extremely useful in helping you know what your expenses are and to manage them.
- A budget also will aid you in focusing on realizing your financial objectives and not just identify them. The reason is because a budget makes us more responsible with our money.
Things you should do to attain minimal tax exposure
First of all, find out which areas you are ready to dedicate extra effort and time to create cash flow if you decide to be a worker in a company. If you are already working as an outside contractor for businesses, you would not have to divide your precious attention and this would make it simpler.
Secondly, set up a limited liability corporation, All Corporation, for the sole reason of creating income outside of the W2 income. Remember that you can earn W2 income from partnerships or limited liability corporations as long as cash flow is present and this is related to something that interests you.
Once you have created the entity, you then need to get to know your allowable business write-off’s. You can get a great overview by reading books that write about tax rules. I highly encourage this. The items below are written off opportunities that are quite common:
- Entertainment during travel for work purposes. Meetings, trainings, conventions are all great choices. You can also write off dinner charges and transportation costs. This means that during this business trips you can splurge a bit more on your meals and your transportation, knowing that in the end you would be able to write them off.
- The cost of the office and utilities which include furniture, subscriptions to magazines, paper, pens etc
- Special services that consists of website hosting services and other items.
- Personal trips can also be written off so long as there is a business related activity conducted sometime during the trip. For example if you are going on a holiday with your family, make sure you try to network or meet up with a potential client sometime during the trip. By doing so, you can write off this personal trip.
One other great benefit for all your effort in knowing the ins and outs of capital, the uses of capital, and the potential of this capital will then increase. In conclusion, your money building power will go up just because you now have a much more in depth knowledge of financial systems, how to use it and how it is supported.