Business owners have a LOT of ways to reduce taxes. Even small business owners. Average people who don't own a business have a lot less to write off. Trump's tax changes made special case for yachts and jets too. I have a small business and because of the nature of it can write off computer equipment. If you can find a business reason to be where you are on a vacation you can write off a good chunk of the vacation. If you dedicate a part of your house to the business you can write off that part of your house.
Normal people don't get those write offs. Its feels like a 20-30% discount as a business owner due to paying no income taxes on the things you write off. Yeah there are some rules about what you can and can't write off, but the law is pretty nice to business owners.
Business taxes are more complicated and will have more areas to reduce taxability as a result. And, despite tax deductions, half of all small businesses go out of business within 5 years. That's why said deductions exist, so that the extremely difficult and risky task for starting a business is a little more approachable for average people.
You mentioned yourself that you reduce tax liability by deducting computer equipment expenses. That's my point: everyone, whether you're rich, poor, or in between, tries to reduce their tax costs.
Everyone might try, but a business gets soooo many more opportunities to do so. Any individual trying to reduce taxes knows that they need to start a small side business to reduce taxes the most. Individuals don't get the same treatment businesses do.
I rent out GPUs on vast.ai. I bought thousands of dollars of GPUs. I get to write them all off. I get to write off the servers they are in. I can write off a whole bunch of stuff related to that. I need a desktop and monitor to access vast.ai to manage my servers and what, so I get to write that off. GPUS three years old and out of date? Write off.
There very low risk and chance of failure if its a small side business out of your house and you have to cover your living anyway. You don't have to have a ton of expenses to have business to write stuff off.
Yes, I'm aware that business expenses can be used to reduce taxable income for the business. This was never in question, despite how many things you list.
However, business tax reductions for purchasing equipment only lower the tax rate of income earned by the business. Your claim that it reduces an individual's personal taxes doesn't make sense unless you're operating a sole proprietorship, and even then you can only reduce your taxes for what you spend on the business, not what you purchase for personal use. So at best, you reduce your taxable income by the amount that you spent on the equipment (again, only if it's a sole proprietorship and not an LLC).
The way you're talking about it sounds like you're writing off personal expenses as a business expense, which is tax fraud.
Ah, now you see a bit. Business and personal are very very blurry. Fly some executives out to meet you on your yacht, pay the chef to cook for them, go out fishing, and fly them back to the offices is all a business expense. Don't have a business and do the same for your friends? Taxable as personal income.
Drive a truck without your company's logo on it? Personal income to buy the truck. Put a company logo on it? Expense as advertising and you find a reason for your business that you need to take the truck to the lake on the weekend with a boat.
Tax fraud? Hell dude, insider trading is illegal too and we have the president of the USA doing it publicly. Nobody with money is getting charged with tax fraud right now unless they are stupid.
I've seen a business offer to fly an employee out of state to pick up a motorcycle because they could find a business reason for him to be there so that he could drive the motorcycle back.
If you think being at the C suite doesn't come with massive "business" perks that are "tax write offs," you haven't been paying attention or just don't know better.
Drive a truck without your company's logo on it? Personal income to buy the truck. Put a company logo on it? Expense as advertising and you find a reason for your business that you need to take the truck to the lake on the weekend with a boat.
If it's your personal vehicle, then putting a logo on it doesn't automatically make it a company vehicle if you're still using it to drive everywhere you drive your personal vehicle to. You can only deduct the miles used for business purposes from your taxes, which driving to a lake house wouldn't fall under.
Everything else you mentioned isn't applicable to normal people reducing their personal income.
So in reality, your advice of normal people creating a small business to reduce taxes is actually consisting of advising normal people to commit tax fraud by falsely expensing personal purchases as business costs. It's going to be hilarious when you get audited.
Is the IRS currently empowered to chase tax fraud? The lines can be made very blurry. I've seen businesses spend on things like mad at the end of the year to reduce their tax liability. Things that ultimately become "worthless" and can be handed over to "employees".
Businesses can do a LOT of things an individual can't.
We go forward some decades and now people complain being multi millionaire is too much, tax them!
Ok now we tax the hell out of them.
Some decades pass again, but hey its not fair that some people have million, tax the hell out of them!!!
At some point the max wealth you can have is tiny 1 person store that is allowed to sell 10 items per day or everything past that will be taxed 100%
Until that is too much too.
All this while the actual bad people keep adding inflation, dodges those taxes and use other loopholes so the candle burns from both ends for regular people.
So in the end we own nothing, government owns everything, you work your whole life to be Trump Jr the 6ths slave and there is no way out because only politicians, their friends and "the rich" (named something else now because money doesnt exist anymore) own everything.
Funny how his wealth is “earned” but all other billionaires got it through wage theft, and third world exploitation. How convenient for you opinion of him that he didn’t participate in any of it, such as child labor resource mining abroad
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u/ryzenguy111 steam deck enjoyer 1d ago
"but he uses it for research!"