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That's funny, 'cause in my experience, In America, even in California, you mostly get taxed on money you actually make. I mean, mostly; it's complicated. B
by lsc 10y ago
That's funny, 'cause in my experience, In America, even in California, you mostly get taxed on money you actually make. I mean, mostly; it's complicated. But mostly you pay taxes on the net, not the gross. I mostly don't pay taxes on money I spend on employees and equipment (there are a bunch of exceptions; I pay 7.5% on payroll for employees, and depriciation on capital assets is... well, a matter best left to the accountant. Still.)
And, uh, 50% sure, that's what you pay if you take home a whole lot lot of money and live in California... something that usually doesn't happen during the first years of a startup. In my experience, "starting a business" take home pay rarely gets you much above the 20% tax bracket, even in California; you re-invest the rest.
- deleted 10y ago[deleted]
- deleted 10y ago[deleted]
- panamaguy 10y agoI couldn't post for a while, throttled or something. It's personal tax while I saved for later spending on the start-up. Even when optimized the US company tax rate was too high to be viable. I'm not American but could have move the company here - I wish I could afford it because I love living in SF.
- lsc 10y agoah yes, taxes do tangle time-shifting money quite a lot. The way I have seen people fund companies with labor is corp-to-corp contracting; your client pays your company instead of you, then you can (sortof) pay it out as payroll to other people or equipment that year. (for the ranges of money we're talking about here, there are often ways to write off your equipment the same year. Ask your accountant.) It is somewhat more complex than that, and it is harder to get corp-to-corp contracts than to get w2 contracts, and it still doesn't help much in carrying over money from one year to the next, but people do it, and it is a tax-efficient-ish way to get money from your labor into equipment or payroll for the business.