I have to share this with you guys. So, like always in my articles, I do the Y house and then the additionals, so here’s the Y right – and this might be obvious to some of you – maybe some of you – it won’t be.
It is deductions. Deductions are crazy. This is how even fortune 500 companies are able to operate a loss and not have to pay taxes, sometimes even end up with refunds, which is insane you need to take advantage of that if you’re in the u.S I’m in talking to US law, it’s it’s. It’S really really cool in regards to ecommerce. What we’re doing in Amazon, it’s up to $ 5,000 startup cost. That’S so much money, guys $ 5,000! Think of the all the equipment you need.
You need an iPhone or an Android phone right. You need a smart phone. You need a computer, so all that cost can be deducted from the startup cost. Here’S the cool thing. I know if you just start it now or maybe a couple months ago, anything you’ve purchased in the year of 2017. Let’S say because you know we’re coming up on the tax season, you can deduct so that computer you bought in March. It’S now a company computer.
So if you have the invoice for it, you can deduct it. So you can add up $ 5,000 pretty quickly um. So expenses are anything from from defer. Your deductions are anything from marketing advertising travel. So, like you know, flights or mileage if you’re driving in a car the electricity bill right, everyone has an electricity bill, the internet bill. You cannot do e-commerce without internet. That’S a deduction seminars, classes, accounting costs even so much as meals.
So if you’re meeting say you and a buddy are doing the Amazon, FBA and you’re meeting them and you’re brainstorming, that’s a business meeting right! You can deduct it! Here’S another! Here’S! Another big wine paper loss right. I was mentioning that earlier, so you can actually operate at a loss and that loss of your LLC will compensate for your income tax that you have in your day job. So let’s say you made fifty thousand dollars in your day.
Job and you operate your LLC at a ten thousand dollar loss, keep in mind, we’re not in the business of losing money, but let’s say you’ve lost ten thousand dollars that ten thousand dollars in taxes. You can use the $ 10,000 that you’ve lost in your business. Can be used against your personal income, so you pay less taxes either way right. Here’S the how the boring part right, the very first thing.
Once you form you LLC, you need to put a corporate structure in place, so what that is essentially is you’re going to be paying yourself a salary. The next thing that comes – and I believe this has to be done within 75 days. It’S called an ECE. It’S an entity classification election. Now I don’t know all the details about it, but I can tell you needs to be done within 75 days and what it is is you’re letting the IRS know how you want to be taxed.
If you do not do this as an LLC, they will basically just decide to tax you at the highest rate, which is, I believe, as an individual and that’s a tax rate up to 15 percent. You don’t want that. You want the lowest possible rate. The help right this is this is really boring, we’re not in the tax business, at least I’m not. This is where you get help. I did it with 100 accountants. I would highly recommend them.
https://m.youtube.com/watch?v=iEoblMFulVw
They set things up for you, they’re very personal, and you work with a team, so you’re working with a team, so you’re always going to be working with the same people. The people will already know about your expenses. They will go through your if you’re starting now they will go through 2017 credit card statements, alongside with you, and make sure that you’re getting the solid deductions remember they’re working for you.
Their best interest is to provide you with good service, so your remain on them. On the you know, on their payroll, your remain as a customer I mean, and and basically save you money, so the cost for that is about two to three thousand dollars annually. I know that’s a lot they do. You can split that up in payment. They do let you do that and then there’s a 30 dollar retainer. Now don’t freak out guys.
I know that’s a lot of money and that might not be the first thing you want to think of doing, but consider it as you know, as a cost to starting your first. You know your first product really right. You know you’re putting in such a financial commitment you’re going to drive yourself to success. Anyways right. It’S it’s another big thing. You know having no plan B, it’s it’s it’s a big thing, sometimes just jumping with both feet in and yeah it’s and then at it’s.
Just the 30 to 30 dollar cost. The cool thing is: if you need any so articles consultation, they don’t have any hourly fees. You just set up an appointment and you just talk to them. It’S it’s no problem, so there’s no hidden cost. Here’S the crazy thing on top of that we’re talking about deductions earlier right, you can deduct that. So essentially it’s done for you for free, it’s already a tax saving.
Not only will they do your personal business, you you Peart, they will do your business tax and they will do your personal tax. So if you’re already paying someone for your personal tax, you can scratch that right off you’re going to get that done with them anyways. So awesome, that’s the information I wanted to share with you guys. Let me know down in the comments below if I misspoke on something, if there’s something you guys want me to look into and share with you even further put a like hit subscribe thanks for reading
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