What if I want to invest all, or most of the money I make in a business/site/etc. Would I still have to pay taxes? Seriously, I don't know anything about taxes. Someone explain how they would work.
Income - expenses = profit. You pay taxes on profit. Expenses have to be business related. So, if by invest you meant stocks, real estate etc. then you would have to pay the taxes first and do your investing with after tax money.
Ok. First anything you pay for that is used for business can be deducted off your income. Income is what you earn from business or interest or investments and work. Cell phone car and computer can be. Dsl can not but dial up can go figure that one. Envelopes and stamps for business all that is used for business can be deducted. Now add it all up and take that off what you earned. Example 1,000 - 500 = 500 now you have $500 in income. That is what taxes are paid on. Now if you want to pay less taxes you can get a REGULAR IRA not a roth and deduct the $4,000 you are allowe to put in it a year. $4,000 is what your allowed per person and you deduct what ever amount you put into a ira that year. If you put $500 and had $500 in income no taxes are owed. Any other investemnt will not be deductable only Regular Ira. Roth iras are tax free you pay taxes on the income but get the money when you retire and pay no taxes on them. If you spend all income on business you pay no taxes but only sertain things can be deducted. Get a good tax book and read about all of it. I know it is boring and hard to figure out but you will be ahead of most peopleafter you figure it all out.