Monday, May 1, 2017

Passive income is taxed favorably

The key in whatever you do is to productize. Many consultants have figured this out. For instance, graphic designers might sell posters in an online store. Or an attorney might sell a course online. What these folks have discovered is that if you can make a product that people want to buy, you can scale a business and make money even when you’re sleeping.

One key here is you need to start a business entity. This can be a LLC, a S-Corp or a C-Corp or some other suitable entity. The best thing to do is to consult an attorney and a tax adviser on the best one for you.

The advantage of a tax perspective is that passive income is the lowest taxed income. Also, you can run many expenses through a business that people in the E and S Quadrants simply cannot.