You need a small business to take advantage of every tax deduction and business expense that you can legitimately take. Don't have your own business? Let me tell you why it matters and why you need one now.
Most people have zero idea what their tax rate or tax bracket is. Let's assume you are a somewhat financially stable family that makes $80,000 per year. At the current tax rate (2016), you will owe 25% of that to Uncle Sam or $20,000 (this is also assuming you file married filing jointly which is the most beneficial). Because Uncle Sam so graciously takes that out of your pay prior to you getting your paycheck, most people have no idea that 25 cents of every dollar goes to taxes. This is your tax rate, 25%.
Now there are all sorts of deductions and loopholes that one can use on their tax returns to lower their tax bill. One is itemizing your tax return instead of taking the standard deduction. This is what the wealthy pay really good accountants to do. They itemize every single possible deduction so they pay as ;little tax as possible. Their effective tax rate is often less than 15% (and sometimes much, much lower). In fact, this Washington Post article points out that in 2012, the top 50% of earners averaged only a 14.3% tax rate.
The second thing that the wealthy do is to own a business that can legitimately deduct expenses that the average person doesn't. Owning your own business means the expenses of running the business are deductible against the income of the business. Can you personally deduct health insurance on your taxes? A business can. Can you personally deduct office supplies? A business can. A business can also deduct retirement contributions, payroll, and bonuses against the business income. I will have a lot more to say about this soon.
The point here is that working for yourself can and will offer big benefits if you can make it work.
The tax benefits are just one reason that you need to own your own small business.
I will expand on this in the future for sure.