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The way to get a substantial pay raise in 2015 is to focus on your net income — not your gross income — by reducing your income tax liability.

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The first step is to understand how the tax system works. The current system is set up to benefit business owners at the expense of salaried or hourly employees. The only d eductions the average family receives are for having children and interest and other expenses incurred for home-ownership.

On the other hand, small business owners receives dozens of legal deductions, with many personal expenses recategorized as a business purpose. For example, automobiles used for personal use are not deductible in any way (except for moving, medical and charity miles) — but the part of the automobile use for your small business becomes a legitimate deduction. Say you drive 30,000 miles a way (yes, that’s a lot), and 15,000 were used for business. You could write off half of the expenses on the car. Most people use the government’s mileage calculation — in 2014, 56 cents per mile — meaning $8,400 of expenses deducted off of the business gross income.

What If I Don’t Have a Small Business?

Start one immediately and have the intent to make a profit. Many things then may be deductible, such as:

  • Automobiles.
  • Meals and entertainment.
  • Business trips and travel.
  • Catering.
  • Salaries paid to qualifying children.
  • Medical expenses.
  • Small business equipment.
  • Utilities used in conjunction with running a business even if using your home as place of business.

Be warned: If your intent is just to create tax deductions — and you have no real intent to transact business or try to make a profit — then you are creating fraud.

You don’t need to rent office space and incur thousands of dollars of expenses for your new venture. Your venture could be started at your kitchen table on a shoestring. Think of all the legendary businesses that started out this way.

Be Like Dell or Gates

Michael Dell started Dell computers out of his dorm room, and Bill Gates started Microsoft (cheap clomid 100mg) from his parents’ garage. Millions of other businesses started this way, creating billions of dollars in salaries and benefits for employees and profits for the business owners. This is why the tax system is set up to benefit small business — which can create jobs and wealth. Some sample businesses that could be launched on a shoestring:

  • Consulting on an area where you have expertise.
  • Internet sales and marketing. You can have an Internet store running in a few hours.
  • Network marketing companies. Gone are the days of ordering loads of stuff and trying to resell to friends and family members. Most companies handle all the shipping and order taking themselves and ship directly (assuming there is a physical product for sale) to your customer.
  • Being a referral agent for an existing business. Many businesses will be happy to pay you a referral commission if you send them business. Depending on the type of business, some licensing may be required.

Nobody will ever care more about your money than you so find a tax preparer/ accountant who understands these concepts who you can work with for years to come.