More Income Tax Tips
written by John Chow
Seeing how well my latest income tax tips (here, here and here) have gone over, I figure I would link to some of my older articles on blogging and income tax. Back in July, I did an entire series on how to avoid income tax. That series got a huge reaction as well, with some people saying what I wrote about was illegal. I can assure you it’s not. Tax avoidance is not illegal, tax evasion is. For those readers who were not around in July, you’ll find the following posts to be worth reading.
Top Ways To Avoid Income Tax - Part 1
In this opener, I talk about the number 1 way to avoid income tax and that is not to make income. How do you live with no income? Read the post to find out. You’ll be amazed at how well you can live without income.
Top Ways To Avoid Income Tax - Part 2
In part two, I gave three examples on how someone can earn from $30,000 to unlimited each year and pay zero taxes. The income earners profiled were the principal resident flipper, the dividend earner and the perpetual traveler.
Top Ways To Avoid Income Tax - Part 3
In the final part of the series I show how setting up an International Business Company in an offshore district can reduce your tax to zero. I also explain how multinational companies use their offshore subsidiaries to effectively reduce their corporate income tax to 3%.
How To Pay 17% Tax On Net Income of $400,000
Those of you who already read My Blog Business Structure will know how I do this. However, the article is still worth a read because I go into another benefit of owning a corp and that is making $750,000 of tax-free capital gain.
Remember, it’s not how much you make, it’s how much you keep!
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(10 votes, average: 3.7 out of 5)
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Its a shame i live in the uk. I just did my tax return and had to pay 40% which is way to much in my opinion would rather it be the 17% mentioned in your post.
40% tax!! You must make a lots of money
That’s it..I guees you make money too? do you
Whoa 40%. You should consider incorporating offshore and then hosting your sites offshore.
I’m in the same boat as I’m from the UK but using some legal loopholes you can save a bundle on your tax.
Most of the ones John has mentioned here are applicable to the UK some are more beneficial however
I’d contact a qualified accountant for further details though 
This post is pretty much a one stop shop for a howto on managing your income.
Really top advice John, I’d have to pay my accountant £50 an hour to get all this and its here for free. Admittedly i’ll still need the accountant to do the paper work but atleast I have a starting point on how to manage my income.
5 Stars John.
Everyone should Digg this post. These tax tips are some of the most interesting posts that you’ve ever come up with!
I second that.
isn’t john on autobury or ignore or something like that digg still?
I thought so too. He’s too evil for Digg. lol
John is digg banned.
oo wow i didn’t know that … Why would digg do such thing like that ?
Does anyone on Digg really needs tax tips? Maybe they can write off the non-slip shoes they bought for their part time job at Burger King or write off their expenses for living in their parents basement.
Bookmarked for later read
John…I’m glad you mentioned it, I can’t believe it when I read through these comments that alot of people think what you are doing is illegal! You have really opened alot of eyes and these are clearly the greatest posts of all-time on this blog!
Going to read through these as I loved your tips provided last week!
Ride the wave John, ride the wave
I’ve have seen you post about making a corporation to save on taxes, but have posted about how to do this?
Nice collection of posts John! I’m going to save these ones too
Living on no income eh? Haha, what a concept! 40% income taxes in the United States is based off salaries that are in excess of something like $357,000 … I forgot the exact number.
You have to remember that all of these numbers are marginal taxes, not average. In other words, it is the highest percentage you need to pay for your assets, but taxing is progressive so your first X dollars are only taxed say 15%, then from X dollars to Y dollars it is taxed 20% and so on. Peopel that say they are in the 28th percentile typically only pay around 18% taxes.
If we had a flat tax we wouldn’t have to worry about all this stuff.
Verry nice tips, I always learn something new here. Bum, out.
We need more badass posts like this one JC!
Bookmarked for future reference, really good advice am going to apply it to my own finances.
Its definitely a post that I will bookmark and come back when I will make my first 100k online!
definitely your best posts (aside from cars), thats for sure…really show your intellect in accounting…
just to let you know, even though you can close banner out, those banner ads, and peel away ads are very annoying
i think john that all these posts are very useful perhaps what you should do is add these in the bottom of each of your new tax posts so users know where to go for more info.
Dont forget to also deduct your mileage! In the US for 2008 its 50.5 cents per mile!
John, if you get a deduction like that in Canada, then you should be able to deduct your driving to the restaurants that you go eat at to do reviews of them for your blog!
Tim
That’s right, it’s all about how much you keep. You don’t want to be giving money to the government that you don’t have to.
And the best method everyone can use to avoid the income tax (and many other taxes) is to support the Fair Tax!
http://www.fairtax.org
I don’t think we can get too much information when it comes to taxes for business. That information is always good to have. Thanks for sharing John.
Rob West
How to save money on your blog’s income
From John Chow’s blog, here’s an amazing list of tips to save money on your blog’s income tax.
Seeing how well my latest income tax tips (here, here and here) have gone over, I figure I would link to some of my older articles on blogging and inco…
John, keep it coming. People can’t resist reading about how to avoid paying taxes. Avoiding taxes should be one of the principal motivations for people to become entrepreneurs and start their own businesses. As an employee, you’ll never get ahead, because you will always owe a huge chunk to Uncle Sam. As an owner of a corporation, however, you have so much more flexibility.
Very good blog posts, i really needed that.
John, you must be making quite a lot to pay so much tax. Am I eyeing your income. No, no way, just joking! Your tips on how to avoid Income Tax will really help. I need to study how it works in India. Keep giving tips like this, buddy. People like me hardly know about all this.
http://www.worldinurpocket.com
You got some great tips there John…including things us bloggers should know
-Mike
[...] John Chow’s Income Tax Tips [...]
I hope I have that much income that I need to avoid income tax. I have tagged your post for my future reference, when I start earning so much that I need tax management tips.
Well, I don’t know. In my opinion, if you make that kind of money you should really pay the tax on it. Putting it back to the community is a great investment. But that’s just my opinion.
Great Tips John!!
Wesley Snipes recently had a running in with the IRS for tax evasion and I’m sure he could have used some tax tips before all that happened.
Some in the US feel the tax on income is illegal and not in the constitution. There have even been documentaries on it, such as “Freedom to Fascism”, where former IRS agents are interviewed and say they looked and looked and found that there is no written law in the books requiring US citizens to pay tax on their labor.
~Terry
[...] When owning your own business, you decide where the money goes. Chances are good the company you currently work for pays twice the amount of your take-home pay for the privilege of you working for them. All that extra cash your company pays that should rightfully be yours is siphoned off the top to 401(k)s, insurances, investors, share holders, Social Security and state and federal taxes. By the time you actually receive your paycheck, you are only paid for half the value you provide to your company. John Chow recently did a series on taxes and blogging. Here. [...]