How to Legally Not Pay Taxes

This subject has been covered in a variety of ways. People have written books about it and many have claimed their advice to be legal when it really wasn't.

However, it's a proven fact that most people DON'T cheat on their taxes. Why? Because they are scared of the Federal Government and what may happen to them if they cheat. Even the person that will fraudulently fill out a credit card application and charge purchases under another person's name normally will not cheat on their taxes. That's how influential we have made the government who serves us.

But the Federal Government is actually EMPLOYED BY US! That's right! So are doctors, lawyers, restaurants, grocery stores and anywhere else we spend money. Think about this the next time you are sitting for hours in a doctor's waiting room. When you have waited a sufficient amount of time after your appointment time, inform the doctor's receptionist that you are leaving unless you are seen. They won't like it -- but there are plenty of doctors that would love to have the money your insurance company is being billed. Stand your ground and demand your rights!

Being in Business for Yourself

When you start a business from your home, you are actually creating a lucrative way to avoid paying taxes on things you normally would as a typical consumer. All of a sudden, you are allowed to take legal deductions off your monthly mortgage payment, electricity, clothing, gasoline, car payment, food and other necessities. For instance, you can eat at a fancy restaurant with your spouse if you discuss your home business while dining. Then, this restaurant meal becomes tax deductible. (Save the receipt.) Think about that the next time you settle for McDonald's.

But the legal way to not pay any taxes at all is to have a SERVICE business. A service business is a service that you provide that does not include the re-sell of a product.

For instance: Babysitting, making crafts, typesetting, desktop publishing, drawing, writing, mowing lawns, fixing and repairing various items purchased by consumers, etc.

But if you make extra money by buying and reselling cars, and you buy a car from Joe down the street and re-sell it to John -- you and John are required by law to pay state taxes. Why? Because the car is a product that you purchased from someone else. Just like if I write a book entirely myself, I don't have to pay taxes when I sell the book. But if the person I sell it to decides to re-sell it -- they are responsible for paying taxes on it when it's sold. Why? Because the customer did not write the book. The book took on the heading of "a product" when my customer bought it. See the difference?

And the reason the creator of a service does not have to pay taxes is because the Government cannot tax your brain's creativity and talent. They can only tax actual products.

So why then have you heard that people who babysit (a service business) have to report their income? Because if the person you babysit for decides to claim you as a deduction on their income taxes (for social security purposes), you have to report your income -- only because of social security laws and regulations.

But if you provide another type of service like typing for college students, selling crafts that you sew and create (remember, the taxes were already paid on the materials you bought to create the craft), writing a book or informational product, etc., your customers will not normally claim this expense as a deduction on their PERSONAL taxes. They may claim it as a business expense (if you sell the service to a company), but that side of the coin takes on an entirely different set of tax rules and regulations.

Don't be overwhelmed. Contact your local IRS or County Licensing Office to discuss if your particular service is exempt. Don't take chances.

Related Articles

How to Get Hundreds of New Books Free

You can receive hundreds, even thousands of new books each year free by becoming a "book reviewer." Offer to write a column for your local paper for free.

Achieving Success in Business

Perhaps the most sought-after goal in our present society is success in business. Whether you want to be promoted into high-paying management positions, or wish to start your own independent enterprise, knowledge of the business world is important.

Checklist of Questions to Answer Before You Buy a Franchise

Franchise businesses such as Wendy's, McDonald's and Jack-In-The-Box are booming. The people setting up franchise ideas and businesses know a good thing, and are really promoting this idea.

Secrets of the Richest People

Would you like to realize your goals? Maybe you'd like to run your own business, expand your material possessions, or succeed in the arts. There is no one path to the pot of gold, but many people of all backgrounds have successfully found it.

Secrets of Economizing in Inflationary Times

During periods of high inflation, most people have to "tighten their belts," and watch their expenditures a bit more closely. After all, buying on credit and attempting to spend more than you have coming in is a sure-fire road to financial ruin.

What Makes an Entrepreneur Tick?

It is only natural that when you start a business, you are doing something different than most people.

What to do if Somebody Owes You Money

If you are owed money and have not received any payment over a reasonable period of time, there are several steps you can take to collect, even before going to the expense of hiring a collection agency or lawyer.

How and Where to Get Money for a Franchise Idea

How often have you thumbed through a business opportunity magazine, noticed a franchise opportunity advertisement, and felt you'd really like to get in on that...if only you had the money?

How to Raise Money for Your Franchise

How often have you thumbed through a business opportunity magazine, noticed a franchise opportunity advertisement, and felt you'd really like to get in on that... if only you had the money?

Smart Stamp And Coin Investment

The fact that there are far more stamp and coin dealers than stamp and coin brokers, that few wealthy people hold portfolios of these collectibles, and that few hobbyists ever live long enough to get rich from their knowledge, tells us something.