Why Some Self-Employed People Pay Thousands Less In Taxes Than Others


As Tom pulled into his driveway, he was annoyed at himself.
He found himself doing it again, and he didn't like it.
Yet, he seemed compelled to do it anyway. It's just that if anyone
knew what he was doing, he would really be embarrassed. After all,
who looks at his neighbor's garbage all the time?
Tom reached up to his visor, and pushed the square button on the
garage door opener. He was lost in thought as the garage door slowly
moved up. He pulled the car in and had to navigate to get the car in
without hitting his wife's car or the bikes that were sloppily thrown
in.
He pushed the door opener again as he climbed out of the car, and
couldn't help but glance out toward the neighbor's house. The last
thing he saw as the door moved toward the concrete floor, was the
pile of trash.
He opened the door to the house, and was greeted by Becky. She was
just getting home herself. She still had her raincoat on, as she was
leafing through the mail.
"Hi, Babe," said Tom as he kissed her on the cheek. He took his coat
off and as he was throwing it on the back of the barstool he
asked, "You know, I'm embarrassed to ask this, but have you ever
noticed the Jacobson's garbage?"
Becky had a silly look on her face. She replied, "Well, actually, uh,
now that you mention it, yeah, I have. Are you talking about all the
boxes from all the new stuff they buy?"
"Yes. I hate to even admit this, but I can't help noticing they seem
to always have new appliances, or furniture, or whatever, for
themselves and the kids. I don't want to sound nosy or anything, but
I know Richard's business makes about the same as mine. You notice
they also go on vacations a lot, and they sent Conner to Northwestern
University? How do they do it?", Tom mused.
Becky was wondering the same thing. Actually, she was curious why so
many of their Business Owner friends lived so differently. Some
better, some worse. And even though she knows there are some unusual
circumstances, it just doesn't add up. How do Business Owners like
the Jacobson's do so much better?
"He must make a lot more than we think," Tom rationalized, as he
headed for the refrigerator.
No, Tom. It turns out that Richard Jacobson doesn't make more money
than you do. In fact, Richard and Tom, these two typical Small
Business Owners, own very similar businesses that bring in about the
same amount of money every year.
And when you compare the overhead expenses of these two businesses,
again, things are pretty much the same.
There is really only one major difference between Richard's business
and Tom's business. Only one item that accounts for Richard having
so much more profit than Tom does every year --- and that one area
is TAXES!
I've seen it time and time again in my 15 year career. I call
it "The Tale of Two Small Business Owners." They have the same
amount of money coming in and about the same amount of money going
out --- except for taxes.
Tom is The Typical Business Owner. He pays his taxes with anger and
resentment, not realizing that there is a better way.
Then there's Richard, who is hardly The Typical Business Owner. He
is The Rare Exception. He has learned how to squeeze more juice out
of his financial orange, so to speak.

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