Make Money in a Recession
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Make Money in a Recession – The ‘Big Leagues’
If you are trying to figure out how to make money in a recession you are probably spending lots of time trying to come up with ideas on what income is ‘real’ income, or how to avoid the taxes that you’ll invariably get on your savings, or how to log negative income is an accurate way to find out what they’ll do with your profits. In modern New York (for example), the tax laws for small business and the self-employed are so complex you want to limit yourself to simply picking and choosing the sorts of LLCs that your accountant may advise you to set up. However, the entire enterprise about incorporating your business or reporting your profits is something that you must take care with in order to get the best results. The reason that tax strategies matter is that they give you ways to legally defer tax costs and reduce the amount of tax you pay so that your overall cost of doing business is drastically reduced. The key is to look carefully at what sort of entity to own for whatever the purpose. Even if your objective is to create tax-free gains, it doesn’t matter as much what kind of business you are running if you end up having to pay excessively high taxes because you have a functional Charitable Remainder Trust or a bunch of retirement plans. This is the reason why dealing with corporations is more difficult than it should be.
2. A Private Interest Foundation
One way to make it through a recession without constantly losing money is to set up a private foundation and give away a sum of money each year. Many people will try to tell you it’s difficult to get wealthy as an individual providing you have built up a net worth ofBetween two and three times gross possessions of the amount you’ve made through your income. You may have to think a little harder about the assets you have than you might imagine to make it all happen, but it can still be done. In fact, you may even make more money by doing it. The IRS has Free File and people who make around $28,000 or more in adjusted gross income can use that program to help them file their taxes without worrying about wasting money on fees. There are more details on that policy, but in a nutshell: for most taxpayers, the key is what kind of returns they are hoping for, since the more assets they have (the more they will make on their capital gains), the less tax they will have to worry about. On the other hand, if you do nothing with your money, you will have to pay more to Uncle Sam than you would if you made passive (investment) returns. The path that makes the most sense for you can potentially be the easiest and cost the least, but it requires you to start thinking outside the box and outside the Box.
3. Prepay Your Taxes
Or, if you can, prepay with a loan. This provides one of the simplest ways to keep more of your money, and it also provides a way to plan your taxes better. If you can take out a loan against putting money into a CD or some other account that will reduce the amount of interest you pay on your loans, it is one of the best ways to keep your money out of reach of the tax man. Additionally, if you put money directly into an account, you can take advantage of lower APRs or to take advantage of features such as free checking and online banking. For example, if you have money in a CD and you borrow against the CD, you can pay off the loan and have the money in the appropriate account without incurring a debt that you have to pay interest on. You can re-invest the money that you originally borrowed, and it will not be taxed.
4. Make Your Interest Dividend Tax deductible
Interest dividend payouts from individual stocks and shares are tax deductible. Not all dividends are considered tax deductible. You have to review Internal Revenue Service guidelines to determine which ones are applicable and which ones you can deduct. However, you can put your interest dividend payout to a charity, if you want to claim the deduction.
5. Get a Roth Account
If you have a lot of money, you may want to consider opening a Roth account. Your contributions to a Roth account are made after you pay taxes — not when you take the money out. The money in the account is yours, no one else can take it away. Make Money in a Recession
6. Live Within Your Means
Everyone knows that you must learn to put aside money for emergencies. But you should explain that money is earned rather than received. You may need to adjust your budget or spending habits so that you live within what you can afford now and what you know you’ll be needing in the future. The best way to do so is to look at your situation realistically so that you can accept the fact that things need to change.
