People tweeting stuff. We allow tweets from anyone.
RULES:
Related: Robert Reich posted earlier today that Tesla paid ZERO taxes on $5 billion in sales (earnings?), so that’s just fucking great.
Income is the worst way to make money.
Which is why these rich clowns don’t make (relatively) much money. All of it is capital gains and loans. Taxed far less and not at all, especially when it’s routed through all sorts of expenses and shell companies.
Well how else are they going to subsidize the losses of the rich if not with your dollars?
Pro tips:
Many jurisdictions don't require you to have a business license if your revenue is under a certain threshold and the work you do is unregulated. Basically, you can just decide you own a business at any time without filling out any paperwork.
Housecleaning, auto mechanic, and IT consulting businesses aren't regulated and can be used to justify 90% of common purchases. A YouTube channel is a business and can be used to write off anything you make a video about.
Any major purchases you made throughout the year can be declared as an asset of your business. If you say you only use it for business 50% of the time, it's practically impossible for anyone to disprove.
Also, 50% of the money you spend on those major purchases can be declared as a business loss, which further reduces your tax obligation.
So, let's say you bought a PC and a 3D printer this year. You can decalre both as assets belonging 50% to your business, declare half the cost as a business expense, and declare no income from the business. You can also declare half of your gas purchases as being for your business. You'll get a credit for the asset, and a credit for the "business loss."
Basically, you can create a company that has your home address as its HQ, say it didn't earn any money, but you invested in it. Then, declare ordinary purchases as assets and investments into the company by saying you use them for business 50% of the time.
There's no requirement to have a business license before telling the IRS you have a business. There's no requirement to run a business "well" and there's no penalty for running a business badly. Receipts aren't required to declare assets or losses, but you may need them if you're audited. You're unlikely to be audited due to the 50% declaration. If you are audited and you have receipts, you're covered.
Disclaimer: I'm not a tax professional and this isn't advice.
shit I should have claimed my laptop
(I'm not a professional and this is not tax advice)
However, I have a home business pulling in a few thousand a year.
About business losses, I think you're partially right. The IRS has a tile that you need to show that you're trying to make a profit, despite losses. One of the ways they do that is showing a profit over the course of a few years. (Maybe 3 out of 5 years? My memory is foggy.) But if you don't seem like a business, then you are only allowed to deduct up to the amount that you earn.
But yeah, year one of a business, you can definitely take a loss. And why not? The IRS is short-staffed so fewer audits.
I feel like this is all well and good until you need insurance. If you damage something and get sued without insurance/LLC, they're suing you directly instead. Dicey territory depending on what you're being sued for.
I do programming as a hobby, and it's not out of the question that some day I'll make something that will be sold. Can I claim my gaming PC and my homelab as business expenses? As well as my electricity and intenet?
I'm not an expert on tax, but I can tell you from personal experience that for the company that I run, with me being the only employee, I claim anything related to the business. The grey area is what percentage it's used for the business, I'm not sure on that part. I have a separate laptop I use for the business and when I purchased it I claimed it 100 percent. Like stated though keep your receipts to cover your ass.
I am also not an accountant, but in my country even a failed business project is still a business project. E.g you run an IT consultancy and suddenly decide you need to do something with AI. Wellll now that gaming PC with a really over the top GPU is actually a business purchase because you NEED that VRAM. AI project didn't do all that well? Oh well, shit happens. Keep the PC tho, maybe you'll need it for another project soon.
Home office is another fun one. In my country, you have to decide what % of different purchases are for business vs living use, for tax-free expense compensations. But the interesting thing is, you can go really in depth with that. 20-40% of your toilet paper could be business usage reasonably, depending on what percent of awake time is spent working vs not working.
There's a joke on a Family Guy episode where Peter starts a business, then later on he's like "Lois we need to immediately put a desk in every room in this house". It's a good joke but I wondered how many people would get it.
I fell like the disclaimer should really be at the top. Specially because it is very geographically dependant and this is the internet.
The 2025 Big Beautiful Bill lets you write off 100% of the expense on the year you purchase it, instead of depreciating it over several years. Make big purchases, pay less tax dollars to this government.
Disclaimer: I am not an accountant or financial advisor, do your own homework to see what qualifies in your situation.
So funny!
Pro tip: if you are actually making side income like this and reporting it to the IRS then in many situations you can deduct the costs of the things you needed to buy in the course of generating that income.
This does not work on W2 income, though, as much as it would be nice to deduct the costs of driving to an office etc
That only matters when the value of those deductions exceeds the standard deduction though, isn't that right?
No, deductions for business expenses happen "above the line" so they reduce your taxable income. The standard deduction happens "below the line" and is applied to your taxable income after business expenses etc
Yes and for the purposes of reducing taxable income, not the overall tax burden.
An example in a vacuum: If you report $10,000 and itemize a $2000 deduction for an expense, you'd be taxed as if you made $8000.
Some take it to believe the $2000 deduction means they deduct $2000 from what they owe in taxes and then feel cheated and blindsided when they still owe.
The standard deduction is just under $16,000. So if we round things out: the tax bracket for the first $10,000 of taxable income is a 10% rate. If you made $26,000 you'd owe $1000 with the standard. (26k minus 16k, leaving 10% of 10k.)
In this same scenario if you could itemize $26,000 in deductions on $26,000 of income, you'd owe $0. No one self employed or any worker can actually do this reasonably. But large businesses can, and do.
This is how billionaires pay no taxes. They use their business expenses, loans, and losses to deduct the entire amount of their taxable income to eliminate any possible tax burden.
Oh cool, I can write these off on my taxes! Oh oops, the standard deduction is higher. Well, maybe next year itemizing will save me more!
(Next year): Hm, maybe next year.
(Next year): Hm, maybe next year.
(Next year): Maybe next year.
Above the line deductions reduce your taxable income, from there you take the standard deduction or itemize. You are conflating two separate events
That's because Bezos's net worth is in imaginary money. His actual income from Amazon was only like $80k a year.
Unrealized gains shouldn't be taxed unless they're being used as collateral to get real money.
Dude, I'm on 80k a year. Pretty sure I couldn't afford a gazillion-dollar wedding in Venice
And? My point is the real money he got from Amazon that can actually be taxed is not the same as his estimated net worth.
Bezos doesn't have a checking account with billions sitting in it. His wealth is in the unrealized gains on non-liquid assets. It's imaginary money until it's used as collateral for loans, at which point it should be taxed as a realized gain.
That would be the "unless it's used as collateral to get real money." part
How about a wealth tax on this imaginary money?
What amount will be taxed? The assets change value every second the market is open. If you have a hard capture date, then the wealthy will tank their stocks right before.
The best way to tax it is to treat the use of the asset as collateral as a realized gain and tax it as such.
The real question is how many billions in welfare government bailouts and credits did Tesla get?
Republicans are so worried about poor people on welfare, but Tesla would literally be closed without welfare money. Rules for thee.
Walmart