Case Study: Turning $2,500 into $25,000 (or more) every single year

Like Rumpelstiltskin spinning straw into gold, you may qualify to magically (and legally) turn $2,500 into $25,000 (or more) this year and every single year on into the future. Read more to see if this works for you.

Written by Stewart Patton

Bob is a student of mine—he took the Tax-Savvy Expat: Entrepreneur course. Let’s talk about Bob’s tax situation before and after taking the course.

First, the facts

Bob lives full-time outside the US. He visits the US about once a year, always staying for less than a month each year.

Bob has a couple of different businesses:

  1. a products business (selling items on Amazon FBA) and
  2. a web publishing business (selling ads and doing affiliate marketing on a niche website).

Bob has a couple of independent contractors who help him with his businesses, and both of them live outside the US.

When he started business, he knew he should operate through a legal entity. After looking around, a Wyoming LLC seemed like the obvious choice. So, he formed a single-member LLC in Wyoming, and he didn’t elect S corp status.

Bob nets about $100,000 per year currently from both businesses. However, he has some serious growth opportunities on the horizon that could easily cause that number to skyrocket.

Before becoming a Tax-Savvy Expat

Let’s talk about Bob’s US tax situation before he took the course.

Because Bob operates these two businesses through a single-member LLC, Bob is self-employed for US tax purposes. So, right off the top, Bob must pay self-employment tax every year, which costs Bob about $15,000.

Then, Bob must personally deal with the US federal income tax on his $150,000 of income. He can take advantage of the foreign earned income exclusion, but that expat tax benefit doesn’t work well for self-employed people like Bob for two reasons:

Then, Bob doesn’t have high enough housing expense to take advantage of the foreign housing deduction, and he doesn’t pay any non-US tax (so the foreign tax credit doesn’t help either).

So, Bob must pay around $10,000 in US federal income tax each year. Combine that with the self-employment tax, and about $25,000 of Bob’s money gets sent over to the IRS every single year.

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After becoming a Tax-Savvy Expat

Bob found me through listening to the Tax-Savvy Expat Podcast. He then decided to set up a new legal structure using the Tax-Savvy Expat: Entrepreneur package.

Through several easy-to-follow video lessons, Bob learned that:

So, operating under his new legal structure he set up with the Entrepreneur package, Bob’s US tax bill drops down to $0 a year. And Bob isn’t doing anything illegal, shady, or the slightest bit risky or on-the-fringes at all—he’s simply taking advantage of age-old tax rules that have a simple application to his situation.

Spinning straw into gold

Tax-Savvy Expat: Entrepreneur comes with everything you need to get your non-US corporation structure up and running.  It comes with the initial fee for the actual legal structure, plus help to get it all set up.  It’s much more than just an info product–it’s a toolkit to get you up and running as easily as possible.

So, back to Bob, his $2,500 investment allows him to legally keep at least $25,000 in his own pocket, year after year after year. That extra boost to Bob’s business has allowed him to:

It’s also just put him on a better footing to grow in the future.

You can do the same thing

Have any ideas for what an extra $25,000 every year would do for you?

You can use the same structure Bob used as long as you meet the following three requirements:

If you meet those three requirements, you can also significantly reduce your US tax bill, perhaps even to $0 a year, simply by using the proper legal structure for your situation.

The First Step

The first step is to understand the exact structure you need to set up and exactly how to do it. The Tax-Savvy Expat: Entrepreneur package shows you everything you need to know.

Then, beyond just showing you how this all works, the Entrepreneur package is the way to actually put this legal structure together. The Entrepreneur package includes:

Finally, the Entrepreneur package comes with a consultation with yours truly. On our call, we’ll cover any unique aspects of your situation and make sure you have everything you need to get up and running.

It’s really that easy. In just a week from now, you could have a structure all set up that saves you money, year after year, all completely legally.

Want to know more? The Tax-Savvy Expat courses teach you everything you need to know about expat tax.

Stewart Patton

I'm Stewart Patton, US tax attorney and expat entrepreneur based in beautiful Belize. Read more about me here, or email me at [email protected] to discuss how I can help.

U.S. Tax Services, P.O Box 2651 Belize City, Belize • Belize tel: (+501) 629-6007 • U.S. VOIP: (312) 675-8571 • Email: [email protected]