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Thanks for the reply! Is the corporation listed as a C-Corp? Doesn't the business have to pay taxes on profits, then pay employment taxes on what it pays to em

Thanks for the reply! Is the corporation listed as a C-Corp? Doesn't the business have to pay taxes on profits, then pay employment taxes on what it pays to employees as well, on top of what the employee must pay?

deleted 9y ago
[deleted]
robterrin 9y ago
C corps pay taxes on operating profits which are gross revenues (that is, revenue less cost of goods sold, which for software companies is usually 0) minus operating expenses. Operating expenses include salaried employees. Then you take out interest from any debt you have and pay a percentage on that towards taxes, to get your net profit. Net profit is the amount available to actually take home for shareholders. Once you make your distributions to shareholders, you are left with retained earnings. https://en.wikipedia.org/wiki/Net_profit#Example https://en.wikipedia.org/wiki/Net_profit#Example