They like to call him “Unlce Sam” over in the United States, but whatever name you have for him, the taxman pretty much wants to scrutinise every last bit of your financial affairs with the aim of seeing just what he can lay claim to out of it all. Actually no, what he wants is for you to scrutinise your own financial affairs, perhaps even with the help of an auditor, accountant or tax practitioner, and then declare what you owe to him in line with the tax laws you’re governed by.

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It sounds insane, doesn’t it? It’s true either way — a very big part of how much tax we end up paying relies on our own honesty, but this perhaps doesn’t really apply to those who are formally employed. If you’re formally employed, the likelihood is that you have your income tax deducted automatically by the company you work for. Your earned salary comes in the form of a tax-deducted package, which can be both a blessing and curse. One the one hand you don’t have to worry about liaising with a tax practitioner in order to determine how much you owe in taxes, but you also then miss out on some of the advantages someone like a self-employed individual or entrepreneur gets to enjoy with regards to the way in which they have to do their taxes.

There may be some slight differences depending on the local tax laws governing the country of your permanent residence, but generally entrepreneurs, business owners and self-employed individuals can leave paying their taxes until the end of what is commonly referred to as a financial year. This means that they have a bit longer to perhaps put some of the cash they have on their books to good use, so as to generate more turnover and profit. It’s definitely an advantage to be able to hold back a bit on paying your taxes since some opportunities to make use of that money often present themselves at some rather awkward moments during the financial year. It takes a lot of discipline to stay on top of what you ultimately owe at the end of the financial year though, but it’s the sort of discipline that’s implicit with being someone doing their own thing to earn money as opposed to being employed.

The tax man however wants a piece of every pie, even some of your gambling winnings. Whether you play lottery online, bet on the horses or if you hit the casino every now and then, if gambling is something which you’re considered to do “regularly” as a source of income, the taxman wants a cut of your winnings. It may be a bit difficult for the tax authorities to prove that your gambling efforts are consistent with those of someone who uses gambling as a source of income, but either way, the tax man gets a huge slice of the gambling pie, even if we only consider how much they tax gambling establishments such as casinos.

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