Tips for folks who make cash income.
If you are not reporting income, it may because you owe back taxes, owe child support and/or just don't want to pay taxes. Unfortunately, the only way you will be able to get a conventional loan is to file a tax return every year. Otherwise, you will have to pay cash for a house.
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Back Taxes |
Talk to a CPA and make a deal with the government. Usually the government would rather collect some money than no money. As long as you make payments on time, you will be able get back "Into The System." |
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Child Support |
I know that you would rather cut your wrists than talk to your ex-spouse. The road to success is to make a deal. Some money is better than no money and your ex-spouse will probably take your offer. If you are making sufficient income to pay child support, you need to face reality and cough it up. Those kids will eventually grow up and you will have learned a valuable lesson that you can pass onto your kids. |
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Don't Want To Pay Taxes |
Well I don't like paying them either so we're on the same page. The next time some yahoo politician suggests that you pay more taxes for some government boondoggle, you can tell them to back off.
In the meantime, the only way you will be able to get a conventional loan is to file a return every year. There are strategies to reduce your taxable income. These usually involve setting up a business. Regardless of your profession, this is easy to do. Here are some suggestions:
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You Make Cash At Night |
You start a business called "Claudia's Casual Wear" and your business is selling clothing. Interestingly enough, you sell clothes and make a lot of cash on Friday and Saturday nights. No one cares where the cash comes from. Your expenses of course include buying clothes, jewelry, shoes and many other items unique to your business. Other expenses include cell phones, air fare, and your "office." |
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You Are In Construction |
You start a business called "Eric's Concrete" and your business is pouring concrete. Your boss will scratch his head when you tell him that you are going to be a sub-contractor and you are going to get your contractor's license. In the meantime, he will 1099 you and all of your income goes through your business. All of your expenses will be associated with that business - the massive 4x4 that eats fuel, your favorite ATV and all the cool tools. |
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You Own "An Interesting Business." |
Make up a business, give it a generic name and pass all your cash and expenses through your business. I'm not suggesting that you do something illegal. I'm suggesting that you operate your life like a business and leverage your money like other people who build wealth. |
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You are not a citizen |
There are legalmethods for you to own property in America. Essentially you will own property through your business. This is a complex process but a clever lawyer can make this happen for you. |
Your objective is to create an identity that files a yearly statement to the IRS. This filing is essential to getting a conventional loan required to purchase a house. I can set up a business for you. I charge $100/hour and it will take about 5 hours of effort to start. After that, you will work with a bookkeeper to track your income and expenses. It will take some learning and work on your part but it will pay off in the long run.
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