Today TaxMama hears from Kathy in Florida who tells us. “My husband currently works “under the table”. We declare his total income and are subsequently hit every year with owed taxes. Would it behoove us to make him a sole proprietor of his own yacht cleaning business? Would we be saving on taxes, or would we end up paying more?”
Hmmmm….someone is unclear on the concept here.
Is it me?
Is your husband doing yacht cleaning now? Then he already IS a sole proprietor.
That’s what the term means – one person who owns his own business.
What you and your husband need is to understand just what it means to run a business – both for tax purposes and profitability purposes.
What I suggest that you do is, start by reading Small Business Taxes Made Easy.
The concepts in the book will help your husband get into compliance with local and national laws. In addition, it may just give him some ideas on how to improve his business. But the main purpose of the book is to give you some ideas on how to structure your business to cut your taxes to the bone – within the law.
The book will also explain all about making quarterly estimated tax payments – so you’re not hit with a big balance due each April.
As you each read the book, make notes about things that may apply to you. Now you have a starting point to understand what tax-cutting strategies apply to you. Then take those notes and questions to a good, local tax professional. The tax pro can help you implement what you’ve learned – and add their wealth of experience to improve on the information the book provides.
And remember, you can find answers to all kinds of questions about not working under the table and other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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