Taxes - Employee Vs Business Owner

Did you know that there are two different tax systems in the United States? Did you know that the average U.S. citizen pays roughly 42% of their hard earned income to the government?

First, let's talk about the two tax systems. The first system is for the employee. The employee has a set hourly wage but before he sees any of his hard earned wages, the government takes what they deem is their share. Only after the government has had its take does the employee finally get the left overs.

Usually the amount the government takes out per check is more than what the employee will spend in food, fuel, housing broadband offer transportation.

The second system is for the business owner. The business owner makes his money free internet speed test pays for the bills he has incurred to operate the business. Then and only then does the government get to take their share. The government has to wait until all the bills have been paid.

Which tax system would you like to be a participant in?

Start a home based business and you can participate in the second system. This doesn't broadband suppliers that you have to have a brick and mortar business though you can. You don't have to hire additional employees, though you can. You don't have to quit your wag200g streamyx job, though you can but I suggest that you wait until you know you will be making enough money to live on.

There are three requirements the IRS has to be qualified as a home based business.

Intent to Make A Profit

You need to show that you have intent to make a profit. This doesn't mean that you need to make a profit, just that you intend to. You can do this several ways.

Write up a Business Plan. It doesn't need to be anything fancy. It can be something a small a page long that outlines what your business is about and how you plan to make money. Essentially, it's your goals and steps you are going to take to see the fulfillment of those goals. It is up to you how detailed you want to get.

Open a separate business checking account that is used for the sole purpose of your business.

Incorporate your business. There are more but these are some of the basics that show the IRS that you intend on making a profit.

Work your business on a regular basis.

This is the second qualification. This means you work a set amount of time a week. It can be as little as 45 minutes a day four or five days a week. Having said that, you do need documentation on when your worked. This documentation can be in the form of notes in your day planner.

Run your business like a business.

This is the third and final qualification. This means that you keep track of the activities you accomplish. You will already be broadband solution provider on your way if you have a day planner for the notes. Create a paper trail. Keep track of memos, bills, etc. that show your business transactions.

I ask you again, which tax system would you rather participate in?

Marie Northrup lives in the beautiful Idaho panhandle with her husband and daughter. She also a son who is currently serving a church mission in Brazil. She is involved in several business opportunities.

To learn more about what inspires Marie Northrup visit: http://networkmarketingprospect.com and http://overallwealth.com.