.income_

There are 7 common types of income stream. Each income stream have different tax stuctures bolted on to them given the type of entity that takes in the income. Below is table of common income stream and the common tax structures that apply:

income types:

(start)

tax structures:

entity types:

revenue

qualifed business
income (qbi) +
employment income

small business

earned/stock
compensation

ordinary income
+ employment income

individual
(w-2)

interest

ordinary
income

asset

dividends

ordinary
income

asset

rental/
leasing

ordinary
income, QBI,
capital gains

small business,
asset
‍

realized
appreciation

capital gains

asset

royalties

ordinary
income +
employment income,
qbi

small business,
asset

illustration:

profile:

assets:

income:

potential
tax structures:

Machinist
37 years old
married, two kids
believes tupac is still alive

owner of illustration Machinist, llc,
400k home,
100k investment portfolio - taxable

Pay himself 85k in wages,
takes distributions

1. Qualified
Business income
2.employment
income [employer
/employee]
3.ordinary income
4. capital gains

Identify income and assets, then bolt on all the tax structures that applyto each type. NExt steps are trying to identify which way to adjust thecenter tube meant to depict a higher volume of cashflows. WE are tryingto figure out the optimal point of realized income to bring balance to theequation income and borrowing capacity  ...