Are you feeling lost in the labyrinth of entrepreneurship taxes? Don't fret! We've decoded the complex world of taxes for you, whether you're a W2, 1099 worker, or an entrepreneur receiving cash through Zelle or Cashapp?
In this enlightening episode, we underscore the importance of cooperating with the government, staying updated on your tax obligations, and the potential benefits of tax education at schools. Our goal? To help you navigate your financial obligations like a pro!
But that's not it. Ever thought about setting up a C-Corp or S-Corp could provide your employees with a tax break?
We unravel this and more! Not only do we champion the importance of understanding taxes before diving into the business world, but we also encourage learning from the inevitable missteps along the way. Ready to take your tax knowledge to the next level?
Listen in for a journey filled with personal anecdotes, valuable insights, and hard-hitting truth bombs about taxes and the government!
P2SF Podcast Official Intro By Lay Loe Tha Mos Produced By Chief Ali
https://podcasts.apple.com/podcast/id1696215502 www.bnbossn.com @permission2_speakfreelypodcast @layloe.thamos, @mochachoco_latte @kweenland All merch made by @nessas_crafty_nest, All music, production, and vocals edited by Chief Ali, Keep Powering Forward #chiefali đ§đŊââī¸đĨđ´đŊđĒļ
Are you feeling lost in the labyrinth of entrepreneurship taxes? Don't fret! We've decoded the complex world of taxes for you, whether you're a W2, 1099 worker, or an entrepreneur receiving cash through Zelle or Cashapp?
In this enlightening episode, we underscore the importance of cooperating with the government, staying updated on your tax obligations, and the potential benefits of tax education at schools. Our goal? To help you navigate your financial obligations like a pro!
But that's not it. Ever thought about setting up a C-Corp or S-Corp could provide your employees with a tax break?
We unravel this and more! Not only do we champion the importance of understanding taxes before diving into the business world, but we also encourage learning from the inevitable missteps along the way. Ready to take your tax knowledge to the next level?
Listen in for a journey filled with personal anecdotes, valuable insights, and hard-hitting truth bombs about taxes and the government!
P2SF Podcast Official Intro By Lay Loe Tha Mos Produced By Chief Ali
https://podcasts.apple.com/podcast/id1696215502 www.bnbossn.com @permission2_speakfreelypodcast @layloe.thamos, @mochachoco_latte @kweenland All merch made by @nessas_crafty_nest, All music, production, and vocals edited by Chief Ali, Keep Powering Forward #chiefali đ§đŊââī¸đĨđ´đŊđĒļ
Speaker 1:
So, freedom speakers, we got something pretty serious and heavy for y'all today. Man, we're gonna be talking about race yourself.
Speaker 2:
We're gonna be talking about taxes man Taxes man Taxes, taxes tax, especially for all the people who are entrepreneurs, who are hustlers, who got a weekend warrior, who do a couple of things for money on the side, anybody that wake up every day and punch a clock Like this. Information is for you because it affects us all. Man, and if you a homeowner or you own in anything, you become an entrepreneur by default. All right, so I want to repeat that so you really understand what I'm saying. Once you own something, you become an entrepreneur by default.
Speaker 1:
Hire people to work on your place. You got to pay a separate settle. You know it's, it's good. It's pretty much like becoming a beauty after you run your home. You manage your home. Something break, you got to fix it. You bought you in charge.
Speaker 2:
You get your card Normally. That's the first one. Man, yeah, managing your whip, man Can't call the leads in office now For sure, man, you so. So what we're going to do first is man break down what taxes are, and a lot of people are subjected to taxes and not even really fully understanding what they are.
Speaker 1:
Okay, so if you a.
Speaker 2:
W2 worker, meaning like you work a nine or five somewhere, man, you get a W2. Or if you a entrepreneur who classifies as an escort and you make yourself an employee of your own company, you get a W2 as well. So shout out to all W2 workers 1099 workers, entrepreneurs, anybody who receives any kind of cash through cash shop back page. I don't care how you get your money, but this information is for you. Taxes are and this is the way I break it down taxes are your fees to the government, which we will nickname what a lack of a better term use the mob. The government is the mob. They can be really cooperative with you if you're paying your fees and getting you paying your tax, paying your fees to one pay, which are taxes, they'll be very cooperative with you. They'll even go to bat for you if you are lining up with what they're saying, you being cooperative with them. Yes, it's not a negotiable thing too much, man. You have to be cooperative with them. Biggest point you don't want to do is get in bad with them, all right. So a lot of times people do not even know where to start or how it starts up. People kind of getting in bad with the taxes.
Speaker 2:
So, as entrepreneurs, when we host an orientation, a lot of times people spill out a W9 form, they fill out a W4 form and they ask you head a household? They ask you, well, if you're single, if you're married, if you're married, if you're falling separate or joined. They ask you a lot of these questions. They ask you dependents how many dependents you have. They ask you if you're legal immigrant to work, if you want deductions out, and a lot of times people don't know what that means. They they access us as the entrepreneur or the decision maker that's helping them and they don't know. But in most cases that's where it starts. Yeah, a lot of people will claim 10 dependents on their taxes and they don't have 10 people or 10 things that they're taking care of.
Speaker 2:
So just a disclaimer I am not a tax professional. I just pay them to help me stay in line with the government as a as their profession and a in a, something that I am. The team needs. Okay, I have to ask these questions to make sure I'm in the right. So when we start talking about taxes, I have enough money left over to pay these taxes to the, to the government, not just the IRS government, but your local government, your city taxes, your state taxes, rita, only Rita. I remember as a kid was the bus RTA, rta, shout out to 216 Cleveland Ohio, baby RTA, rita. So as a homeowner man, I got hit with these Rita taxes, man, and I know you own your home, yeah. So tell me just some of the things that you and your wife deal with when it comes to just the taxes and the expenses of being the one to charge man and, like you said, man, cooperation, cooperation, cooperation.
Speaker 1:
Now I'll be honest with you, man, my wife is wonderful when it comes to complying with the government. You don't say in the local town, like you said, the Rita tax, we paying them now, we paying them from about a year ago and then we got to pay for last year. Well, two years ago they got to pay for last year. You know, don't get frustrated. Keep your head strong, stay, you're going to be all right. Just let them know what's going on. You know what I'm saying, and pay them. You can get on the payment plan if you kind of slipped up from the year before. Like Chief said, comply Please, it's comply.
Speaker 2:
It's easier that way.
Speaker 1:
And they call you, answer the phone, they send you a letter, say thank you, you know, but definitely don't get behind, because you know once you get behind, man, they not going to leave you alone. You might think you got away for a little bit, but they going to come back and they going to hit you with some interest.
Speaker 2:
They going to hit you with some penalties, man, and if you've ever been in those positions where you got hit with the interest. I got a smack when I was younger man.
Speaker 1:
I got a baby, my usual name. No, man, when I was 18, it's not knowing man. You know what I'm saying? Shout out to the uh Ufle public school district, man, but they didn't teach us these things. No school district. As far as I know, they don't teach you these things.
Speaker 1:
And these are the things that kids need to know Coming out of high school and into adulthood, is how to properly not only just manage money, but knowing about taxes. What to expect, you know. So my first year as a dump man the whole year, I was 18, was 2010. Paying it was something like didn't pay, they didn't have me on pay right, you was working, but you ain't found. Yeah, I did. No, you didn't.
Speaker 1:
So we just going to assume this amount of money you made off, unless you got a. You know a W, a W, two from that year. You know, prove it. So, instead of me, just on, you know $3,000, I was 7,000. Then you say, oh, you can't show what, you can't show what you made. So here we just going to say you owe this, just to be safe, just so we feel like we actually getting the money that we owe. You know, hey, look here I got three, I got $3,800. What you think, we'll take you in the next, but tighten up, tighten up. We're going to see you next year. It is no avail, no matter what. No evading them.
Speaker 1:
Not at all, don't try. You might think you got away for a little bit, but no, you did not. They know where you live.
Speaker 2:
Yeah, yeah, yeah, man, it's one of those um you can't hide you can't. It's easier. It's better just to comply.
Speaker 1:
I'll give me start.
Speaker 2:
I got you, but we're gonna wait. Do that for that, for the music that we got.
Speaker 2:
I mean it's a perfect song for this area. But I'm gonna give you a quick story, manager, before we even go actually breaking through the layers of taxes and kind of how they do affect you. I myself have dealt with taxes and all realms of Just as a as an entrepreneur. All the bills are addressed to me, all the taxes are addressed to me, someone, and so forth. For, as a disclaimer, I never went to school for business. I Learned through trial and error.
Speaker 2:
I read books. Though I read, this is before YouTube really was popular popular. But I would like watch different things on YouTube, not just about starting a business, but Discipline stuff, just like amen, get up in the morning, drink water, stretch, touch of toes, stuff that just sound cliche but it actually is Revitalizing, if you will beneficial to you in the long run with.
Speaker 2:
That being said, as I've grown in business, I got a chance to stand in my mistakes. So with some years back, I Didn't have the proper financial literacy. Now that I didn't have the proper financial guidance or help, I just was too much big on myself of. I Got it understood I can make the money, I can outrun it. I'm thinking that I know business and I not. And I'm not and I'm just blowing cash. I'm going cash cash, cash, cash, cash. I'm blowing cash. No credit, none whatsoever.
Speaker 1:
Yeah.
Speaker 2:
In a rule of thumb and a quote that I like to use man is a savior. Capital to pay the capital Get you some lines of credit. So at this time I didn't, I was just using a hustler mentality of kind of, where I was from cash in, cash out, I'll make it back. I'll make it back. And once you get in bad with the government and to get with the government, irs or any other local taxes the Bureau, workmask comp, if you got to have staff, if you have Job and family services, you pay into that. If you have staff IT 501 taxes you pay for.
Speaker 2:
It's a lot of insurances that company pays for for its employees as a protection. 941 taxes that can be paid every two weeks, every month or Every quarter, depending on what the IRS rates it to be. But for us, because our payroll is so hot, we have to pay those actions every two weeks. Every time employees are paid, they get paid. It's like, oh, yeah, we Got a paycheck to and we have to show up. Yeah, that's something, that's something man, and this it's hurtful sometimes.
Speaker 1:
Not on that notion so.
Speaker 2:
I'll say it's on the employee side of things, having to pay the taxes for employees. I'm not. That's like. That's what you sign up for in your fine print as the employer when you're signing up as a W-2. They're contracting with you of like this is what I'm willing to do. If you contract with them like 1099 and you're just paying them out of pocket, they are responsible of having to pay their own social security taxes, medicaid taxes and things on their own. But a lot of times people do that when they're self-employed or miscellaneous, because your stuff is pre-tax.
Speaker 2:
You kind of have a better understanding of what projections you have coming in and coming out and how you're kind of placing your money. So, that being said, when we started out in business, we started out as a sole proprietor, llc, and all of our finance was 1099.
Speaker 1:
Yeah.
Speaker 2:
As we started to grow and make more money, it became it was suggested to us as to be able to get a tax benefit to open up a corporation. That would allow us and it's basically a filing with the IRS, with the government we filed a company. We allow people to get the hold of their LLCs. That's a filing with the state of Ohio of a licensed and as a company. After that you license with the IRS, you'll get your EIN number and they kind of classify with industry you in, so your tax property. After that you go to the bank and you can open up a actual business bank account. Now your business is a legitimate person. So in that way, in that filing, and that's basically how you set up a business on paper. But when we set up our business on paper like that, we were a LLC, sole proprietor, just money.
Speaker 2:
As we started to hire and grow, I was paying out unemployment tax and social security tax and Medicaid tax on the schedules that were stated by these government departments, on the back end of the profits that we still had to live off of and maintain that we still weren't sure really how to, because we never did it. We got taxed still as an employee. I mean, we still got double taxed technically, because we're paying taxes for the employees along with us doing work. And then we got taxed on the remaining finance, especially if we didn't have enough write-off to show like, hey, this is what this extra finance was used to maintain business. We still had to be paid, but this is where the money was allotted to. So as we started to grow and to not, it was suggested to not be double taxed and the company can get some type of tax break. And I'm not too big on the numbers, I'm not 100% sure, but I wanna say it's like a 15.9% tax break.
Speaker 1:
Tell us what you know.
Speaker 2:
Put a 15% point tax break on, like your P&A, on your money. I don't count no to terms.
Speaker 1:
That's his job.
Speaker 2:
That's his job. You know what I'm saying? Shout out to Ken Slovik from Kelly's Tax, that's my man. Shout out to you, ken, but Love you he. But he basically suggested like, hey, man, for the money that you're making to not be taxed so much, it's time to open you up a corporation, and that will allow you to become like you'll become a C-Corp or S-Corp, however you wanna classify it. S-corp is like a single corporation, or C-Corp, I think it's like one corporation that operates or oversees another corporation Probably got a YouTube or Google that a little bit more. But you get a tax break because now you get to put yourself as an employee of the company and you get a tax break and when you're paying your employee taxes, you're paying those taxes in for yourself as well.
Speaker 1:
Got you. You have to put yourself.
Speaker 2:
On salary, you have to take a substantial salary but you get a tax break up and you not being double tax or even triple tax For sure. But does that make sense? Man, I know that's a lot.
Speaker 1:
No for sure. Does that make sense? Definitely makes sense, man. I'm pretty sure the freedom speakers out there appreciate knowledge I know I do. You know and just learning this stuff, man, but taxes is something that you really wanna know about, especially if you're looking to get into business. I know a few entrepreneurs who all share the same sentiments of man just getting into it. I made some mistakes. I made some mistakes, I didn't know, and then had to kinda go back and get it right and it ended up costing me. But you know, we live and we learn. We live and we learn.