Tax Day 2018 has passed. April 15th Federal Income Tax Day (this year April 17) is the one day a year when most people accurately see their total income for the previous year. Tax day is when the government determines how much of the income hard working people make is left for them to spend and live on. This is not the case for business owners – People working a GIG.
Business generates revenue, as do individuals, but business operating expenses are deducted before tax liability is determined. This means a business is able to deduct their expenses, the costs of doing business allowing more discretionary spending. Business expenses include cost of goods sold, capital investments, auto expenses, mileage, repairs, meals and entertainment, lodging, and even clothing when the expense is business necessary.
How does this affect a GIG Business? When you work a gig you are able to deduct those business expenses which decrease your tax liability. In essence you determine how much you spend of the revenue you generate, allowing the government to get the leftovers.
Your friend,
Tim