My earning money on the side allows you to deduce your business expenses. This is significant ramification to have this avenue of tax deduction. But before you can use it, you need to earn money on the side first.
How’s it going to everybody this is beat the bush today i’m gonna talk about ten self-employment tax write-off that can make you rich albert einstein once said the hardest thing to understand in the world is income tax now why is it so difficult because usually when they make it very simple people always try to find ways to get around in and they make new rules
And then people get around those and then they make new rules so then it just keeps on getting bigger in terms of the tax laws now here’s a disclaimer i am not a tax advisor i cannot advise you on what to do with your taxes my hope with this video is to point you in the right way that there are such things that exists out there you may not qualify for them but
You would know about the topic and then you can go research that yourself some more maybe talk to your financial tax advisor and then get things cleared out to see if you actually qualify for it everybody’s individual situation is gonna be different so all these things i list may not actually apply to you you might not be a self-employed person but i think that
Even if you’re not self-employed you should really watch this video because then you would get an idea of how much benefits that you would get if you try to earn money outside of your regular job there are so many things that you can write off this translates to all that money that comes in you are not paying taxes on it because you’re just expensing them as part
Of your business now let me begin to my surprise that this year is my full year of being self-employed and to my surprise that you can actually write off self-employed health care insurance because i am self-employed i have to pay for this out of my pocket then this is actually a good thing because it kind of subtracts off of the revenue that i have the profits
I have on running this youtube channel and it becomes so that i do not get taxed on it realize that when you are self-employed you’re essentially paying about 14 to 15 percent social security taxes when you’re working for a company you still pay about 7 percent social security taxes and you pay this up to an income of a hundred eighteen thousand dollars now where
Does the seven other percent comes from your employer pay this for you and you do not even see this in your salary when you go the self-employment route it means you have to pay for both sides you have to pay for your own 7% and you also have to play the employer 7% so it becomes more and more expensive to become self-employed but the redeeming quality here is
That yeah you can if you’re good about this and if you’re savvy about it you can write off a lot of your profits so that it does not appear as a profit so that you don’t get taxed on it the second thing that you can write off that would massively dent your profits you know you take it off so that you don’t get taxed on it is retirement accounts that you can use
As a self-employment person depending on your income you may be able to write off something pretty significant tens of thousands of dollars from your profits the third write-off that you might not realize is vehicle expenses in 2018 every single mile that you drive as a business expense would deduct you fifty four point five cents off the fourth thing that you
Can write-off is business travel expenses if you’re going somewhere on business you need to i don’t know go to a trade show relating to your job then you can write off these air fares the hotel bus tickets train tickets all those travel expenses things that you can just actually put in and it would come off of the top of your profits you can write off business
Cellphones and also communication fees now for me i don’t have any so i do not really need to write off that which is a pretty good position you can also write off business meals but this gets a little bit complicated because you can either write off 0% 50% or 100% generally speaking you can still write off 50% of your meals when you are having it with a customer
Or a client 100% write off is a little bit different and they have all these different rules regarding how it’s actually used for example if you’re selling some seminar okay and you actually have to pay for a banquet or something you know you have to pay for the food for everybody then you can actually write off that 100% so this is kind of rare for most people so
You really have to look at how you actually spent that business meal in order to categorize it correctly for this channel i do rent up heel box where i packages relating to business only i do not get anything else this is for the sole purpose of this channel so the cost for that rental for that peal box i can actually write off it’s about two hundred dollars or
So so if i earn two hundred dollars on youtube well it would seem like i did not earn that money at all because it just comes in and it goes out the door because it’s part of a business expense it’s the money that’s required for me to run this operation the a thing is a little bit more difficult which is a home office expense now generally they’d like you to have
A dedicated spot like let’s say you have some room somewhere that is a dedicated home office type of thing they want you to track how many square footage it is compared to the whole property and then also how many percent of the time use that area for business only purposes so they kind of want to figure out okay if you only use a certain portion of your home and
You only use a certain amount of time then you really have to figure all this out to see how much deduction that you can actually get if you’re actually renting a whole place you know off site then that’s a lot easier because you know the whole place is actually a home office compared to for me where this is a home mostly every single video that you see me do is in
This living room now i want to say if you go to self-employment route and you start having expenses it’s very very important that once you start doing this you need to track your expenses every single day now this includes every single mile that you drive if you take public transportation to conduct your business and it’s on some value card or something you still
Need to track where you went and how much the fares cost in order to deduct all this my experience with this is if you do not track it every single day you’re likely not going to remember especially with how much you spent on public transportation given that it’s the same day you it’s still fresh in your memory so you can write it all down so i highly recommend
That you go and log down your miles i have a little notebook inside my car that whenever i drive somewhere i actually write the date i write the start miles to end miles and then i track every single trip and the business reason for each one of those so you can do that the same thing for with transportation same thing goes with the business meals everything that’s
Business-related write it all down no matter how insignificant if even if it’s a dollar if you keep on doing that every single day it’s gonna add up by a lot there’s other things that you can write off in terms of a business expense especially equipment that you use solely for your business it might be interesting to talk about this honey badger here because this
Certainly is not for me to play around with this is kind of like my channel icon it’s on my t-shirt and stuff so i put it here for my video so this was interestingly expense as part of my business expenses you have to be very careful if you are buying certain item and you also use it for personal use you have to keep track of how much do you use it for personal use
Or is your business you know something completely unrelated and then you decide to buy a camera because you really enjoy photography or something and then use it you know just once or twice for your business and then you go yeah you know it’s all business so when you write off business expenses it’s a lot easier when you know that that item is only used for business
You’re never going to use it for you know personal reasons not also if let’s say sometime later you devalue this item you no longer use it or something you need to undo it in your taxes so if you feel like sometime in the future you’re not gonna use that item and then you’re gonna sell it off somewhere then there’s complications with that because you already took
The deduction then when you sell it it’s kind of unfair right in the perspective of the government because you already took the taxes out then that means when you sell it you need to kind of reverse this anyway i just want to mention this just so that you know where to look in the future if you have certain costs related to self-employment now as a general arching
Theme over here i’ve heard it before i did the self-employment route that wow you know a lot of rich people they always have their own businesses now you see why maybe you still see why because all these expenses if you try to integrate all of this into your daily life it means that a lot of the things that you use even though it’s considered business expense it
Might get integrated into your life so that essentially the way that you live your life is one whole giant deduction so my theory and probably with entrepreneurs and people that are trying to increase their welfare their own good is that you should try to maximize your tax write-off within the confines of the law i’m completely not saying that you should you know
Try to cheat the system you go by the books study the write-offs that are possible and follow the rules in order to get those write-offs just like this video you watching this video it’s kind of like learning about brand new write-offs which you can apply to your own taxes thanks for watching this video if you’re interested in supporting this channel check out my
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Transcribed from video
10 Self Employment Tax Write-offs to Make You Rich By BeatTheBush