How To Create A Tax-Free Side Gig (Maximize Your Earnings!)
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- เผยแพร่เมื่อ 19 มิ.ย. 2024
- Are you looking for a way to make some extra money without the hassle of paying massive taxes? In this video, I'll show you step-by-step how to create a side gig that will allow you to maximize your earnings while easing your tax burden.
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🔑 Key Insight: “But it can not be a w-2” 2:52
Undertaking a tax-free side hustle can yield significant financial and professional benefits. So, be sure to take notes to get a better understanding of how you should structure your side hustle business the correct way.
I'll share with you all the secrets to creating a tax-free side gig that will help you reach new heights you may never have thought possible.
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Show Notes:
0:00 Intro
1:03 Tax-Free Side Gig
2:13 1099
4:12 Schedule C
5:14 Corporation
8:16 Accountable Plan
11:22 Outro
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ABOUT TOBY MATHIS
Toby Mathis, Esq. is the best-selling author of Infinity Investing: How the Rich Get Richer And How You Can Do The Same. Toby is a tax attorney and founded Anderson Business Advisors, one of the most successful law, tax, and estate planning companies in the United States. Learn more at aba.link/tobyaba
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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.
#sidehustle #sidegig #taxstrategies
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Applause all around. This guy help tremendously. He is putting his time in for the communities around USA.
I appreciate your support so much. It motivates me to keep doing what I do.
Now that they are spending trillions without reading bills, but care what we do with $600 this will be harder and harder to do.
They changed it to $5k for 2023
Just what I was searching for. Perfect timing!
You are giving solid advices and for some reason people forgetting to like it.
Absolutely informative! Thank you.
Great video! Thanks for your time. Good bless you.
Glad it was helpful!
Thank you for this video💟
Excellent wisdom for Independent stock market trading.
Thank you Toby...I love your channel.
Glad you enjoy it!
Excellent! Thank you!
Thank you👍
Great video Thank you!
Appreciated
I appreciate you 🙏🏻 God bless you ❤
If you take his advice, you better hope a federal judge bless you too one you get charged.
As usual, outstanding job!
Thank you!
Thank you ! I will call you guys for sure.
Please do!
Great info. I see you mention C and S corps...does this info also apply to a LLC?
Perfect timing!!!! 👌👏👏❤️
Thanks Toby, yes I have 3 jobs.
Awesome
Ok, I need this. I live in Omaha, Nebraska, and I am that 20,000 side gig guy. I want to call a lawyer and set this up but I don't want to spend five grand. Does that make sense?
U Da Man ✊🏻
I thought that you couldn’t make Augusta Rule payments for the same building that you take a home office writeoff on. That is, Augusta Rule only works so long as your primary residence is not your primary place of business.
Am I understanding correctly? I need to set up 2 businesses. The second business is an "employee" at the first. Since the employee is a corporation, there is no employment tax, just a 1099 (or is it a business expense for services rendered?). The second business then pays any of my bills that are "for business use." Does the second business claim those as deductions?
wow, a real chalkboard... amazing
Old school
Do I have to have a proof that the corporate meeting is a physical one not the virtual to have the “renting cost for meeting room” to be realized?
Would this apply for like... say I have a full time job but I'm interested in starting a garage door business and not leaving the full time job until that is stable. Say, if I hitup the Midas down the street and replaced their doors for like a $60k sale. That can be tax free?
Would a network marketing business be qualified for this?
Thank you for a great video. There is one person in my household making W-2 wages and I want to start a small business. How does an LLC come into play in this situation?
Glad you enjoyed the video =) For personalized guidance on structuring your LLC and maximizing its benefits, I recommend you sign up for a free strategy session. Visit: aba.link/75f952
Basically it depends on the type of business you are trying to do and what you have personally.
Interesting video, thanks for that information. I saw Uber on car, but I didn't understand at all how that would apply to a rideshare driver. It would be awesome if someone could help me see the pieces I'm not seeing
If you are 1099, you can certainly use an LLC/S-corp/C-corp to generate additional tax savings. It is all a function of math and looking at the tax savings side by side to determine the best structure for you. Feel free to reach out - we can do a quick analysis.
I'm enjoying the knowledge here 💯 also, I will reach out to find out more as this is in my lane for sure. Thank you
Does it have to be a side gig? Can it be your primary gig? What about for retirees that just need a little extra? Does the customer need to pay the corp or can the individual get the payments in their own names?
Should be to the business if at all possible. It can be your primary gig as well.
Thanks for sharing this video! I've been investing in stocks and cryptocurrencies for a while now, and it's always interesting to hear different perspectives. I particularly liked your take on stocks and Crypto trading
Thank you for watching and sharing your thoughts! I appreciate your support and I'm glad you enjoyed my take on stocks and crypto trading.
Does this only work if you are employed under a W2 or for any 1099 income?
1099 income👍
Can this apply to AirBNB business, which has less than 7 day stays? (ie would typically fall under schedule C)
I recommend you sign up to our Free Tax & Asset Protection Workshop and learn advanced Airbnb tax strategies: aba.link/56973c
Dear Toby
I wanted to reach out to discuss some concerns I've been having regarding my past (seven years) and current (two years) CPA's services and explore potential alternatives.
During presentations and discussions with professionals like yourself, I often hear about the importance of tax planning and strategic financial advice. However, my experience with my current CPA has been limited to tax filing without any proactive planning or recommendations for tax optimization. That is what they promise but they only file and there is not planning. Not that I'd been informed or made aware.
In the past, I've been advised to simply pay the taxes (highest tax bracket, 37%) owed without much consideration for tax-saving strategies or maximizing deductions. This approach, while straightforward, seems to overlook potential opportunities to reduce my tax burden, especially given that I'm in the highest tax bracket.
Given these circumstances, I'm left wondering whether it might be beneficial for me to seek alternative CPA services that offer more comprehensive tax planning and advisory support. Your presentations have piqued my interest, and I'm curious to learn more about how your company approaches tax planning and optimization.
I appreciate you reaching out and sharing your experiences. It's crucial to have proactive tax planning to maximize deductions and minimize your tax burden. I recommend setting up a free consultation with my team to help you get started with a free tax strategy session. Visit: aba.link/75f952
Corporation will be paying for the payroll taxes. No Estimated taxes on individual due. Still has to pay taxes. Nothing is free or tax-free in the long run. Unless, you have assets and take loans equal to year expenses consistently. Loans not income on assets.
Couple questions: Why doesn't every monetary business just set itself up as a c-corp? Companies are urging employees back to the office after the 2020 lock downs (speculted due to business real estate). Why not let them WFH and write off their personal office, or does that not work no matter the category of company because the employee is both W2'd and NOT the business owner?
Great questions! To address your inquiries in more detail and explore the nuances of business structures, tax implications, and remote work scenarios, I recommend setting up a free strategy session with our experts. Click here to get started aba.link/75f952
Sounds like this could be your *primary* consulting gig
Absolutely
Can you shift an already-existing business to this model? That’s probably a really dumb questions. ;)
What about LLC vs C Corp?
Great question, in order to assist you further, I highly recommend you request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. aba.link/75f952
Unfortunately, opportunities to have 1099 income paid to a corporation may be limited. I have seen consulting offers from states, non-profits and unions insisting that checks and 1099s needed to be made out to an individual, even if there was a separate employer ID number issued by the IRS. In one project I worked on, a state educational institution initially allowed me to use my business EIN to register as a state contractor but later insisted I register as an individual using my SS number and be paid as such, even though there was no state income tax due in either case.
There is a workaround under those circumstances. Just an FYI.
Does this apply to trading prop firm accounts where the payouts are 1099?
Sure, if you can get the prop trading firm to sign you up with a business to business deal where they pay your LLC/corporation instead of you.
@@headlibrarian1996 cool yeah I can get accounts in a business name. Thanks
@JesseChasteen what trading prop do you use?
I don't know how you would set this up as a gig worker such as DoorDash because I do doordash full time and make about $52k per year give or take
We offer free strategy sessions where we can discuss personalized approaches to enhance your DoorDash experience. Visit: aba.link/75f952
What if you have employees that work for you, can you write them off as well?
Good question. I recommend you attend my free virtual workshop to have your question answered live by my team. Sign up here: aba.link/56973c
*Can a physician who works a second job on a 1099 open an S Corp and write-off some of the taxes? The physician visits the hospital and also works from home for this job.*
Yes, a Physician who is a 1099 employee can create an LLC taxed as an S Corp and have the hospital pay the LLC.
@@TobyMathis
*My tax person told me that opening an S Corp is a bad idea because there is a double taxation. So I don't know what's right for us?*
Can a hire you or your team to discuss and review our situation to see what's the best way to go?
I think the challenge is, how to write off maximum expense when the 1099 income is around $240K
here the thing: you are correct in principle but not accurate on the state by state. I am a freelancer with an S-corp for the past decade. I can ONLY use S-corp when business agree to pay me that way. But in CALIFORNIA, enough businesses have been scared by Gov Grusome Newshit that some of them ONLY allow me to do W2....EVEN if I only work for 2 months for them (the the project ends) so....nio...your theory works ...SOMETIMES
Oh California - they do make it tough. Just a note - even if the company will not pay your S-corp, does not mean you cannot report the income to the s-corp. There is a tax memorandum that explains what you need to do: Fleischer, T.C. Memo. 2016-238 It basically requires a letter to the provider that you are an employee of the s-corp and that you have an employment agreement with the s-corp so that it exercises sufficient control over you to shift the income. Might be worthwhile.
YOU are a GENTLEMAN and a SCHOLAR@@TobyMathis
Id like to contact you for tax season coming up
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Everything he’s professing has some validity but the reality is unless you have a very unusual circumstance many of his arguments may not work. I’ve been a CPA for 47 years. It’s not as simplistic as he makes it sound. To say you will pay zero tax is misleading.
true. THe corporation pays the taxes. I have an S-corp and it pays taxes for me, when I pay myself. But I set it up for the 401k contribution. The problem with his assessment is that in theory it could work but in practice it depends. I am in California, where Gov Grusome has scared some businesses so that they do not allow freelancers to use S-Corp and if you want the job, you either use W2 or you don't take the job. Even if it's a week. So he's not right in practice
What about creating an EIN on IRS website (can do as sole proprietor), then putting your side gig earning$ into an individual 401k? That would be tax free, or pre tax contributions of 100% of earnings - or up to certain limits depending if single or not
UBIT and prohibited transactions would nix that one:-) There is a narrow way to accomplish under limited circumstances.
@@TobyMathis thanks for the reply!
Don’t quite understand exactly what you’re saying though… Lol. I’m newer to this and still learning. So I have done Uber on the side and thought I could open an individual/solo 401k and put it in there tax free. I get a 1099 from Uber as an independent contractor. Then I have a regular 9-5 office job and this side hustle money is extra. I have maxed out Roth IRA contribution for year. So just trying to figure out best way to put more $ aside for retirement… I figure a Roth 401k would be best anyway so I wouldn’t be able to put in pretax if it’s Roth… I have a lot of write offs and deductions for mileage and expenses as is, so leaning towards a Roth 401k… Hard to find Roth 401k but E*Trade has one. For the average person it’s a lot of paperwork to set up so there is always the SEP IRA too. What do you think is best for this scenario? Any suggestions? Really appreciate any insight you can provide…
P.S. I am new to learning about taxes and still understanding how things work. I’m a quick learner though.
At the end of the day it is not tax free. If one runs out of what could be expensed then there’s tax BUT not to YOU.
C corp will be double taxed
isn't that one of the things that trump employees got sued for. getting things like car and apartment use, and not paying taxes on it?
No - tax-free business reimbursements were never the issue. They were paying things like tuition for the grandkids and calling it a business deduction - cars for husband and wife - paying for apartments etc. Over $1.7M in deductions that were really compensation. This is not what we are discussing here - we are straight-laced reimbursing expenses that are business-related under an accountable plan. We are NOT discussing disguising compensation as a tax-free reimbursement. The ole' adage "pigs get fat, hogs get slaughtered" applies here.
You call that freedom? Americans?
Yes