If you're self-employed, the income can go into the business and you can pay yourself based on what you actually need, while the rest of the income gets put back into the work/business. Even when taxed, those taxes that aren't individual income are taxed much lower than income taxes, so you can "avoid" paying taxes directly until you actually reach a point of profitability where you want to extract that wealth from the business you've grown (aside from the money you actually need at the time, which would still come out of the company to yourself in the form of payroll).
Not an accountant, so I'm likely not perfectly stating the point.
I'm pretty sure that applies to something like a non passthrough LLC, but would explicitly not apply to a sole proprietorship, which he is advocating for.
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If you're self-employed, the income can go into the business and you can pay yourself based on what you actually need, while the rest of the income gets put back into the work/business. Even when taxed, those taxes that aren't individual income are taxed much lower than income taxes, so you can "avoid" paying taxes directly until you actually reach a point of profitability where you want to extract that wealth from the business you've grown (aside from the money you actually need at the time, which would still come out of the company to yourself in the form of payroll).
Not an accountant, so I'm likely not perfectly stating the point.
I'm pretty sure that applies to something like a non passthrough LLC, but would explicitly not apply to a sole proprietorship, which he is advocating for.
Yeah, there's distributions and draws. But you still can't make 50% and take home more than before.