Pre-taxed dollars vs Post- Taxed dollars
Money & Success Tip #231 - Pre-taxed dollars vs Post-Taxed dollars
Having the right structure / entity can help immensely for utilising the current tax rules to lower your living expenses. This should be a conversation between you and your accountant to decide the best structure to create for your circumstances. You must be under an entity to be applicable to pre-tax laws.
To understand that each structure has different tax laws that can apply. Tax rules were written to enhance monetary wealth in a fair system for the country (some may debate this), but all in all, they assume structures as businesses will help support the system and they give a lot of tax concessions and deductions to 100% of the money earnt before it is put forward to a tax assessment. Pre-taxed dollars are money that can apply deducts before the totalled amount is assessed for tax.
The idea that money needs to circulate and produce opportunities like jobs, investments, etc. so the breaks are given to this sector. The general employee does circulate money but does not offer jobs or investment opportunities to keep the country viable and they utilise post-tax dollars Post tax is when you have been already taxed on income (like in a nett wage) and then you are taxed again on goods purchased and the tax assessment is based off you gross figure (not including a higher degree of deductions). There are less available deductions available for the end of year tax assessment.
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