"masking" your personal income

[grumpydasmurf]

here is an idea I had last night while trying to fall asleep (Yes I dream about money). Many contractors find ways to mask their incomes to limit taxation. I won't name any names :)

You can take some of your personal funds and make a loan to your company with a high interest rate. It doesn't matter if your company needs the money or not. The interest may be tax deductable, and definetly counts against your company's bottom line. Mean while the money comes to you no matter what it just decides to drive a different street to get to your pocket :)

Run this idea past your accountants. Let me know what they think.

[Rich]

Interesting idea for sure. I may be too ethical but it just doesn't seem right. Or maybe it's me thinking I have bad luck and whatever I do will come back to haunt me ten fold.

[cheap_guy]

You'd have to claim the interest you earned on the loan you gave out.

[mreynolds]

One word, Enron.

[roger g]

And enron seems to have gotten away with it.

roger

[Dano]

I call them (as well as the US Gov) loopholes...if they exist..use them. I make a point of not fudging anything on my tax returns (ethics also) but loopholes are legal, allowed, just not known to us "commoners". That's why I'm a big advacate of the national tax vs our current system...simple..no loopholes..pay as you buy..don't buy..don't pay...

[TROWLER]

here is an idea I had last night while trying to fall asleep (Yes I dream about money). Many contractors find ways to mask their incomes to limit taxation. I won't name any names :)

You can take some of your personal funds and make a loan to your company with a high interest rate. It doesn't matter if your company needs the money or not. The interest may be tax deductable, and definetly counts against your company's bottom line. Mean while the money comes to you no matter what it just decides to drive a different street to get to your pocket :)

Run this idea past your accountants. Let me know what they think.


i ahve heard of this before......

good idea