Last week, I sent out an email talking about how every person out there in the world should have a business that makes them a whopping…
I got some good responses from that:
“If more people knew what wonders that can be done via accounting, they’d be surprised
“And they would think it’s illegal how much more you can keep of what you generate. Smart structuring of entities with a good attorney and CPA is worth their weight in gold.”
Yes, it truly does seem illegal.
And, what’s more, is that it’s really not that difficult at all. It’s honestly amazing more people don’t do this. Because you can literally just make a business about whatever the hell you want to make a business about.
Let me give you an example based around one of my interests…
First, let’s say I was making $100k a year at a corporate job. A simple, easy number.
I have a few various interests. I like cycling.
Let’s say I started a small website based around cycling. I’d talk about my experiences, training for races, the gear I was using, and everything related to that sport. I’d create content and articles about it, and maybe an Instagram or TikTok page as well to drive traffic to the website.
On the website, I’d have affiliate links to various products in the industry. I’d also consider eventually making a digital product myself, a training guide, nutrition plan, or eBook. Something along those lines.
That sounds like a legitimate business, doesn’t it?
Will it make much off the bat?
But eventually it would, and how much it makes doesn’t even matter in this case.
Reason why is simple:
I now have a business based around my hobby where I now have EXPENSES.
Aren’t expenses bad?
Think about it this way.
I get to now write off, as a taxable expense, just about everything related to my cycling hobby. I could write off a new bike purchase, new shoes, new kit, on-going and recurring nutritional things needed…the list goes on and on.
As long as I continued creating content around these things (easy to do, just reviews!), those are all taxable write offs.
So let’s say I spent $20k a year on cycling stuff…(not unheard of…)…
That’s now $20k less that I owe taxes on.
My income is reduced from $100k to $80k (I get it, they withhold, but you can lower that and get some back).
Instead of paying a 25% tax rate on $100k, which is $25k in taxes, instead, I’m paying $20k in taxes on $80k.
This is a very, very simple answer and you should not just blind-copy this strategy. Speak to an accountant, get this set up properly.
This, my friends, is just a taste.
To learn how to build a business around an interest of yours, and reduce your tax bill greatly, AND — bonus — even make an extra income off of this business…
Get my daily emails: