How to Use Three Bootstrap Financing Techniques to Get Your New Business Up and Running Now!

How to Use Three Bootstrap Financing Techniques to Get Your New Business Up and Running Now!

How to Use Three Bootstrap Financing Techniques to Get Your New Business Up and Running Now!

It’s a well known fact that Uncle Sam reserves a portion of your paycheck every pay period. However, there is good news! Listed below are seven types of your income that are generally excluded from U.S. federal income taxation:

1. Gift receipts
Although the gift bearer may have to pay gift tax, you don’t owe the federal government a dime. All cash and cash equivalent gifts you receive are income tax-free.

2. Making Work Pay credit
For tax years 2009 thru 2010, the Making Work Pay Credit was a refundable tax-free credit at $400 for working individuals and $800 for married taxpayers.

In 2011, the Making Work Pay credit was replaced by reducing a part of your social security taxes. Benefits such as these you receive are free from income taxation.

3. U.S. federal tax refunds
All federal income tax refunds are non-taxable, whereas state income tax refunds might be taxable.

4. Roth IRA withdrawals
A Roth IRA is simple. You pay the tax now so that when you make a qualifying distribution later you don’t pay federal income tax.

This is in contrast to a traditional IRA. With a traditional IRA, your contributions are put into the account tax-free. However, when you make a distribution later the entire amount becomes taxable.

5. Life insurance proceeds
The proceeds collected by a surviving beneficiary from a life Insurance policy are not subject to income tax. Nevertheless, the proceeds may be subject to the federal estate tax (death tax).

6. Child support
Whether court ordered child support is paid or received, there is no federal income tax repercussion. This is very different from alimony, which does have federal income tax consequences.

7. Return of capital
Interest, dividends or growth earned on your principle investment are taxable. However, the simple return of your principle contribution is tax-free.


We hope you found this article about “How to Use Three Bootstrap Financing Techniques to Get Your New Business Up and Running Now!” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at  Unfortunately, we no longer give advice to other tax professionals gratis.

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Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.


Alan L. Olsen, CPA, Wikipedia Bio is a proud sponsor of The American Dreams Show.



The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

Untitled_Artwork copy 4 (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

Our mission at is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.

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