Why being self-employed will soon pay off
Dec 18, 2017, 6:12 AM | Updated: 6:21 am
House Speaker Paul Ryan, joined by House Republicans, speaks to the media following a vote on tax reform, on Capitol Hill. (AP Photo/Jacquelyn Martin, File)
(AP Photo/Jacquelyn Martin, File)
The main purpose of tax reform is to make it easier to start and run a business. While Democrats seem to be skeptical, one provision in the Republican bill almost guarantees that’s exactly what will happen.
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Longtime CPA Don DeSantis – I call him the “Tax Whisperer” – says many of you who are now employees might be able to get a significant tax cut by turning yourselves into a business.
“Because, if you’re [self-employed and] if you’re income is below $315,000, you’re going to get about a 25-percent tax cut on your business income.”
You would tell your employer: how about instead of paying me a salary, you hire me as a contractor and make out the check to my new business.
“It’s better that you’re a self-employed person and not an employee. I’ve potentially cut my taxes there 25 percent. You pay a little bit more social security taxes. You potentially lose some employee benefits.”
But it would be legal. It would be legal for the Trumps, and legal for you; Unless the IRS decides that it’s out of hand.
“If suddenly there is this surge of independent contractors the IRS may hop on this issue.”
But I asked Don, with the cuts to the IRS’s enforcement budget don’t you think a lot of people are going to do this?
“I think you’re very correct.”
And just like that — tax reform creates millions of new businesses!
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