Guest column: I’ll take that…

By David Magallanes / Guest columnist

Would you like death or taxes with that?

That’s how it feels sometimes as I write out quarterly checks for estimated taxes to the state and federal tax collection agencies. After going through this tasteless exercise several times during my first year as an entrepreneur, I felt slapped down once again when my tax accountant told me last fall, “You aren’t paying enough taxes. In January, double the payments you’ve been making to both agencies.”

When I was working full-time, I had big tax shelters. Now, as a retired professional and incipient entrepreneur, I’m more vulnerable to the tax laws — which can be a good thing if I play my business cards right as my business grows.

I cut out a Baby Blues cartoon (by Rick Kirkman & Jerry Scott) from my local newspaper. In the first panel, Hammie, the young son, says to his father, “Dad! Look how much money I made selling gift wrap for my school!”

Dad tells him, “I’m proud of you, Hammie.”

Hammie continues, “Now I know what it feels like to have a real job!”

Mom steps into the picture and, reaching down to take all the money from Hammie’s hand, says to him, “I’ll take that.”

In response to Hammie’s statement, “Now I know what it feels like to have a real job!” dad says, “Now you do.”

After reading this (I figured this was one of those comics not meant to make us laugh, exactly…), I tried comforting myself, saying, “Well, everyone pays taxes — that’s one of our responsibilities as American workers.”

But then I had a wake-up call one morning (I thought I was awake!) as I was partaking in my daily coffee-with-newspaper ritual and reading an article that was more serious (or was it less serious?) than the aforementioned comic strip. I read an article that almost made me cough up (or was it inhale?) my java. It read something like this, from CNNMoney.com, October 3, 2009:

In 2009, roughly 47 percent of households, or 71 million, will not owe any federal income tax, according to estimates by the nonpartisan Tax Policy Center.

I’m working hard (though not yet smart enough) and paying taxes through the nose, and half of American households aren’t paying anything?

At that moment, I could have declared, “Life’s not fair!”  But I know better than to launch that pronouncement into the universe.

I could be like some people and rant, and wish a pox upon the tax collectors, and the federal government, and “scoundrel politicians,” and crash a tea party somewhere, and…and…while I’m at it, blame the president (that seems to be in vogue lately…).

Or I could be a good, responsible citizen and express my concerns to my government representatives, and meanwhile feel privileged to be prosperous enough to be paying these kinds of taxes.  After all, not everyone has the income to kick them up (and that’s exactly what it feels like) to such a high tax bracket.

Or, from yet another perspective, I could learn to use the tax laws to shelter much of my income and thereby keep more of my hard-earned money. One way to do this is to establish a bona fide business in one’s home, using the premises as a legitimate place of business with the attendant tax breaks. The laws are written to encourage such entrepreneurship. It is not “unpatriotic” to pay less taxes!

— Real World Projects, a business founded by me in 2009, declares in its mission statement that it intends to “lift others to see the light and wisdom of good health and prosperity.”  This includes the encouragement to build one’s own enterprise and take full advantage of the tax laws that are written in favor of entrepreneurs, including small business owners headquartered in their own homes. You are invited to visit and explore the business website at www.realworldprojects.info In particular, to explore the wisdom of starting one’s own business, I encourage you to click here and visit the Creating Wealth page of my website.

Editor’s note: Please click on links on the right-hand side of the website or click on the Opinion link at the top of the page to see previous guest columns by David Magallanes.