Increase Income by Avoiding Tax Myths
Money Myths and Mindsets
Money myths and mindsets are terms I often use when speaking about increasing income. Our money mindsets determine the amount of money we choose to earn. What does this mean? Myths about taxes and the work involved in monitoring and tracking spending often deter business owners or independent contractors from moving forward.
1. Many people don't want to pay taxes.
2. Many people image large tax bills.
4. Not planning future purchases.
5. Spending without a money plan.
Waiting until tax season to determine $0 taxes does not reflect a successful business. $0 tax reflects the business income is low or the business is overspending. If a business attempts to get a loan then $0 tax liability does not look well to the lending institution. However, if you owe a large tax balance the taxes due reflect a poor or ineffective spending plan. An effective spending plan is based on tax-deductible spending and proper self-employment taxes on money withdrawn from the business.
Your goal should be to increase income and become an effective spender to lower or better manage your tax bill. Reserve money in an account for possible spending. Creating a tax savings plan will help you build savings.
Consult with an Accountant to set up a bookkeeping system for you. The system does not have to be complex but effective to track income, receipts, expenses. The system should produce financial or money reports to determine the financial outlook of your business. Your receipts should be kept in a digital format to avoid the receipts that fade at the end of the year. And create a money plan for effective spending to create more money in your business and lower taxes.
Next newsletter, we will talk about paying taxes out of fear and making investments or purchases out of emotions. Did you just hire someone or lower your pricing because you felt sorry for them? Let's talk about how that affects your income and taxes.
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