Small Business means freedom to produce
The United States has one of the world’s largest (or the largest) economic systems and possibly historically … on this side of eternity anyway. However, do not get carried away; nothing is perfect, and so is the US economy. Despite its many challenges, one of its shining gems is the ability of any U.S. citizen to add value to others by producing goods and / or services for mutual benefit. Profit and livelihood of the manufacturer and solutions to problems and improvement of life for the consumer. Most of us are trained to go to work for others in the form of employees rather than being exposed and trained in the other ways in which income is produced. One of the best ways to learn and educate yourself on the various ways of earning income is through a basic understanding of the US tax system administered by the Internal Revenue Service (visit the US Treasury website). The following types of income are discussed at length by the IRS:
- Earned income
- Passive income
- investment income
- rent Income
How to maximize profits for self-employment
Self-employment accounts for a large portion of the income generated in the United States. When someone thinks of self-employment, they usually see someone who is a home-based business owner, or possibly someone who is a freelancer. In addition to these self-employed categories, some other contract employees in medium-sized and large companies and even partnerships (general and limited) and limited liability companies. Self-employment income derives from a person’s production and delivery of services and / or products to other companies and individuals for profit. The beauty of self-employment is that there is no limit to how much a person can earn. The only downsides are the final amount of time someone has to complete and deliver the product and / or service, and the amount of VAT payable due to the profits earned. The following tactics are a simple but effective way to increase your earnings for self-employed business:
Double your prices and / or prices !!!
Scenario One: Let’s say that you are a business consultant and that you have an opportunity to engage a potential customer for a 3-month contract payable per month. Hour. You are hourly rate of $ 50 per Hours with an expected total number of hours per Week of 20 hours or not exceed 80 hours per week. Month. Based on these variables, the total weekly payment is $ 1,000 and the total monthly payment is $ 4,000. To keep things simple, you are single and plan to earn $ 95,000 in annual self-employment income. According to the 2016 tax filing, you are expected to owe $ 19,637 in taxes. Roughly, you owe $ 5,000 in taxes each quarter. Based on our potential 3 month contract, you can earn $ 12,000, $ 5,000 of which is due and payable for taxes. How can you change this to earn more and cover more of your taxes? Simple … CHARGE MORE! Based on the perceived value of your product and / or service, you must double your prices and / or prices.
Scenario to: Now you charge $ 100 per hour with all other variables constant except that you now plan to earn $ 115,000 in annual self-employment income. You are expected to pay $ 25,237 for the year in taxes or $ 6,309 per year. Quarterly. Instead of just earning $ 4,000 a year. Month or $ 12,000 per month. Quarterly under Scenario One, you now earn $ 2,000 per Weekly, $ 8,000 per week. Month and $ 24,000 per month. Quarter !!!!
You decide: Net of tax paid, you’d much rather earn $ 7,000 or $ 17,691 per year. QUARTER ONLY BY DOUBLE YOUR PRICES AND / OR RATES !!! The choice is yours and it’s called entrepreneurship.